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It's not about logic, it's about power. Banks routinely (once every couple years it seems) get caught rigging rates, laundering money, financing dictatorships o
by chez17 13y ago
It's not about logic, it's about power. Banks routinely (once every couple years it seems) get caught rigging rates, laundering money, financing dictatorships or terrorism, etc... In the US, when it comes to banking it's really not about logic but about power.
- phyalow 13y agoMoney Laundering is a serious risk banks face, you only need to look at HSBC's recent debacles to see why. AML/Compliance at contra Dwolla Banks would have flagged this and quite rightly so. I disagree with your last statement. Could you please elaborate?
- mike_herrera 13y agoIIRC, HSBC signed a deferred prosecution agreement and paid a sizable fine. That's not justice.
- rayiner 13y agoHSBC paid a $2 billion fine for a "crime" that was rooted in negligence rather than malicious intent.
- warfangle 13y agoWait, folks showing up and depositing millions in a go in cash not raising red flags was negligence? That 2BN fine was leveraged for a combined failure to monitor more than $670bn in wire transfers and $9.4bn in dollar purchases in Mexico. You can bet yer britches they made more than 2bn off of all the shadiness -- and when a fine is less than the profit of the act being fined, the act will not cease.
- patrickdavey 13y agoExactly... they made more cash by laundering and then paying a fine. Presumably banks will keep on doing this until there is a real deterrent (like having the entire operation shutdown by DHS)
- warfangle 13y agoMuch like Mt. ...... Aw crap, full circle.
- fianchetto 13y ago> a "crime" that was rooted in negligence rather than malicious intent. Speculation, not fact.
- milkshakes 13y agoActually, HSBC has openly admitted to knowingly and willfully taking active steps to disable specific automated countermeasures put in place to prevent money laundering, as well as deliberately under-staffing departments responsible for AML compliance. There is little question as to their guilt or complicity.[1] Their punishment? Slightly more than a month's worth of revenue. http://www.justice.gov/opa/documents/hsbc/dpa-attachment-a.pdf http://www.justice.gov/opa/documents/hsbc/dpa-attachment-a.p...
- rayiner 13y agoThe relevant text is: "17. From 2006 to 2009, HSBC Bank USA knowingly set the thresholds in CAMP so that wire transfers by customers located in countries categorized as standard or medium risk, including foreign financial institutions with correspondent accounts, would not be subject to automated monitoring unless the customers were otherwise classified as high risk." It's very misleading to leave out the "unless the customers were otherwise classified as high risk." That smacks of someone not understanding how to properly implement the compliance function. The rest of the statement of facts reads like a classic case of a company cheating out on the compliance function (like every company tries to do) and failing to adequately monitor a foreign subsidiary. I think the fine was too small, but the facts are consistent with negligence warranting a fine, not intentional criminal conduct that might warrant jail time.
- milkshakes 13y agoNo, I believe the text directly that follows the paragraph you quoted is more relevant, and I am Not a Lawyer, but the facts outlined do not appear to be consistent with mere negligence, at least any definition of negligence that I'm familiar with. 18. Between 2000 and 2009, HSBC Bank USA, and its executives and officers, were aware of numerous publicly available and industry-wide advisories about the money laundering risks inherent to Mexican financial institutions. 19. Despite this evidence of the serious money laundering risks associated with doing business in Mexico, from at least 2006 to 2009, HSBC Bank USA rated Mexico as standard risk, its lowest AML risk category. As a result, wire transfers originating from Mexico, including transactions from HSBC Mexico, were generally not reviewed in the CAMP system. From 2006 until May 2009, when HSBC Bank USA raised Mexico’s risk rating to high, over 316,000 transactions worth over $670 billion from HSBC Mexico alone were excluded from monitoring in the CAMP system. Furthermore, the remaining 80% of the document goes on to outline a pervasive and long-running pattern of behavior consistent with willful subversion of both the letter and the spirit of AML. I find it disappointing if not unsurprising that HSBC can continue to operate as usual after openly flaunting at staggering scale the very policies that Mt Gox is being effectively shut down for potentially falling afoul of.
- coldtea 13y agoThere was nothing "negligent" about it.
- SODaniel 13y agoSimply 100% not true. They freely admitted to committing crimes, and there is overwhelming evidence they routinely broke the law and helped clients do the same. The 'fine' was a joke.
- cynoclast 13y agoA fine so small it did not impact their quarterly profits much. In other words, it was an acceptable expense.
- nwzpaperman 13y agoEveryone missed Wachovia's dirty laundry story. HSBC is just a British bank, not Chinese, so we get to hear about their transgressions. Got Barclays?
- itsprofitbaron 13y agoRegarding the last part In the US, when it comes to banking it's really not about logic but about power. which you wanted elaboration on, the OP is essentially referring to the fact that power is king (well one of the kings anyway) and in order to have power, one of the easiest ways to do it is through controlling the debt - after all if you can control the debt you can control everything - this is highlighted perfectly when there is any form of conflict between nations as, the true value from conflicts isn't who wins or loses but rather the debt it creates.
- sillysaurus 13y agotrue value from conflicts isn't who wins or loses but rather the debt it creates. Would you expand on this (possibly with examples)?
- deleted 13y ago[deleted]
- itsprofitbaron 13y agoFor instance when two nations go to war it doesn't really matter who wins or loses because, they're both creating debt (the one who loses the war usually ends up with the most debt) in order to fund their conflicts. Likewise, another example is a bookmaker - those who are in conflict are the punters who are betting on an outcome (one of them wins & one of them loses) - however, to the bookmaker it is trivial who wins or loses because they always make money on that outcome. It's the same with the banks etc.
- OGinparadise 13y agoMoney Laundering is a serious risk banks face, you only need to look at HSBC's recent debacles to see why. It's not a risk, it's a business opportunity. At least it was for HSBC http://www.bbc.co.uk/news/business-18866018 http://www.bbc.co.uk/news/business-18866018 . Joe Schmo from small Town, MN would have been a felon by now for doing the same with $10K. The fact that HSBC, other banks (NY Mellon Bank iirc too) and their execs got away with a "cost of doing business fine" shows what's wrong with the system
- api 13y agoThe HN hivemind thinks that corruption and elite deviance doesn't exist. Maybe we're trying to be different from the Reddit hivemind which sees a conspiracy under every rock.
- cynoclast 13y agoMoney laundering is not a risk banks face, it's a profitable venture they willingly engage in whenever they think they can get away with it.