6 ms·

>>> As I understand it, it follows because HSBC and has a major US presence and is therefore subject to US banking restrictions. HSBC operates in many countrie

>>> As I understand it, it follows because HSBC and has a major US presence and is therefore subject to US banking restrictions. HSBC operates in many countries and is notably the market leader in Hong Kong and China to facilitate transfer of grey money to the West. It has little regards to US laws. Local companies only submit to their local jurisdictions (consider an international company as a lose agglomerate of local branches scattered across the world). The US can try to show off but it has little influence over what happens in the rest of the world. If any government wanted to shut down its local HSBC, they'd have done it long ago (and the officials would lose their primary ways to clear money).

franckl 6y ago
US extraterritorial laws are far reaching and used as way to promote US interested. Two foreign entities can be subject to them if the transaction is done in USD for exemple. https://www.natlawreview.com/article/aggressive-extraterritorial-reach-us-economic-sanctions-foreign-company-exposure-to https://www.natlawreview.com/article/aggressive-extraterrito...
- billfruit 6y ago
  I always wondered why for example the FIFA corruption matters are being dealt with through the US justice system, while it appears hardly to have any link with the US, such that US authorities have any jurisdiction on it. That time too there was much concern over the territorial overreach of the US judicial system, esp in Europe.
mthoms 6y ago
I'm not sure I understand your point. Rightly or wrongly, HSBC is bound to certain US laws if it wants to maintain its US presence (including its listing on the NYSE). HSBC has made a choice to abide by that, and so they are co-operating in this matter. Sure, HSBC could choose not to abide/co-operate and face the consequences. But that's not what's happening. So, again, I'm not sure what point you're making.
- p_l 6y ago
  HSBC USA and HSBC in other countries aren't the same company. They are separate legal entities, that might be owned by a company in foreign country.
  - mthoms 6y ago
    Sure. But the reality is that, for one, HSBC Holdings (the parent entity) trades on the NYSE and secondly, HSBC USA accounts for roughly 10% of HSBC Holdings revenue. While 10% doesn't seem like much, that's direct revenue[0] only. I'm willing to bet that withdrawal from the US market would have a negative effect on their revenue equal to many multiples that amount. After all, who would do business with a commercial bank that can't access the worlds wealthiest market? And what would not being able to sell your stock in the worlds wealthiest market have on its' price? I'm not an economist (IANAE?) but I wouldn't be surprised if total withdrawal from the US resulted in a 30-60% collapse in their stock price. Yes, that's a totally made up number :) but I think you get my point: Legal entities aside, HSBC Holdings is duty-bound to comply with US regulations as much as possible in order to satisfy it's investors. [0] https://www.hsbc.com/-/files/hsbc/investors/hsbc-results/2019/annual/pdfs/hsbc-holdings-plc/200218-annual-report-and-accounts-2019.pdf https://www.hsbc.com/-/files/hsbc/investors/hsbc-results/201...
    - user5994461 6y ago
      >>> who would do business with a commercial bank that can't access the worlds wealthiest market? How about every regional and national banks? You realize thousands of banks provide their local markets and have little dealings with the US? The fact that HSBC only does 10% revenues in the US shows how negligible that market is to them. US stock is mostly an investment hold by US pension funds. If the company is ruined or kicked out of the stock exchange, it's by far and large the US population who will take the hit. I doubt the US government would attempt that because it's a self defeating move and they've repeatedly shown they want to bail pensions not destroy them.
      - mthoms 6y ago

franckl 6y ago

US extraterritorial laws are far reaching and used as way to promote US interested. Two foreign entities can be subject to them if the transaction is done in USD for exemple. https://www.natlawreview.com/article/aggressive-extraterritorial-reach-us-economic-sanctions-foreign-company-exposure-to https://www.natlawreview.com/article/aggressive-extraterrito...

billfruit 6y ago
I always wondered why for example the FIFA corruption matters are being dealt with through the US justice system, while it appears hardly to have any link with the US, such that US authorities have any jurisdiction on it. That time too there was much concern over the territorial overreach of the US judicial system, esp in Europe.

mthoms 6y ago

I'm not sure I understand your point. Rightly or wrongly, HSBC is bound to certain US laws if it wants to maintain its US presence (including its listing on the NYSE). HSBC has made a choice to abide by that, and so they are co-operating in this matter. Sure, HSBC could choose not to abide/co-operate and face the consequences. But that's not what's happening. So, again, I'm not sure what point you're making.

p_l 6y ago
HSBC USA and HSBC in other countries aren't the same company. They are separate legal entities, that might be owned by a company in foreign country.
- mthoms 6y ago
  Sure. But the reality is that, for one, HSBC Holdings (the parent entity) trades on the NYSE and secondly, HSBC USA accounts for roughly 10% of HSBC Holdings revenue. While 10% doesn't seem like much, that's direct revenue[0] only. I'm willing to bet that withdrawal from the US market would have a negative effect on their revenue equal to many multiples that amount. After all, who would do business with a commercial bank that can't access the worlds wealthiest market? And what would not being able to sell your stock in the worlds wealthiest market have on its' price? I'm not an economist (IANAE?) but I wouldn't be surprised if total withdrawal from the US resulted in a 30-60% collapse in their stock price. Yes, that's a totally made up number :) but I think you get my point: Legal entities aside, HSBC Holdings is duty-bound to comply with US regulations as much as possible in order to satisfy it's investors. [0] https://www.hsbc.com/-/files/hsbc/investors/hsbc-results/2019/annual/pdfs/hsbc-holdings-plc/200218-annual-report-and-accounts-2019.pdf https://www.hsbc.com/-/files/hsbc/investors/hsbc-results/201...
  - user5994461 6y ago
    >>> who would do business with a commercial bank that can't access the worlds wealthiest market? How about every regional and national banks? You realize thousands of banks provide their local markets and have little dealings with the US? The fact that HSBC only does 10% revenues in the US shows how negligible that market is to them. US stock is mostly an investment hold by US pension funds. If the company is ruined or kicked out of the stock exchange, it's by far and large the US population who will take the hit. I doubt the US government would attempt that because it's a self defeating move and they've repeatedly shown they want to bail pensions not destroy them.
    - mthoms 6y ago