HSBC Receives Second Warning From Bank of England About Conduct Risk Controls
13 November 2019: HSBC has received a warning from the Bank of England that it is not doing enough to tackle concerns about how it handles risk arising from financial crime and staff conduct. According to HSBC’s top investment banker, Samir Assaf, the bank’s Prudential Regulation Authority has told the firm that it has made insufficient progress with regard to non-financial risks. This is the second time in as many years that the PRA has raised concerns with HSBC, which Assaf now considers “an emergency requiring attention”.
The announcement follows findings from a confidential survey by the UK’s Banking Standard Board earlier this year, that found HSBC to rank lowest out of seven banks when staff were asked whether colleagues acted “honestly and ethically” flexed ethical standards to make career progression and turned a “blind eye to inappropriate behaviour.”
The warning is the latest in a string of comments coming from various regulators about the importance of non-financial misconduct – an issue which has been historically overlooked by many firms. The PRA, in particular, only recently issued a Dear CEO letter to insurance firms to raise “deep concerns” about corporate culture, see PRA raises “deep concern” about corporate culture in Dear CEO letter to insurance firms.
