Showing posts with label Bank. Show all posts
Showing posts with label Bank. Show all posts

June 10, 2015

A Criminal bank “too big to Jail" Now Lays off 250,000 Workers


With HSBC's announcement that it will lay off 25,000 workers, sell its Brazilian and Turkish businesses, and separate its retail operations from its investment banking in the United Kingdom, you could be forgiven for thinking that the financial sector is in some kind of trouble again, or that regulators have forced the industry to cede some of its stake in the global economy. You'd be wrong.
At least in this country, finance is back and feeling better than ever, as Neil Irwin wrote in the New York Times last month:
Seven years after a crisis that shook Wall Street to its core, the financial sector’s economic imprint has largely recovered. The number of people working in the securities business nationally has returned to 2007 levels, as has the gap between the compensation of Wall Street workers and that of everyone else. The financial sector as a whole is reporting profits that are as large a share of the overall economy as in the early 2000s and more than double their average level over the 70 years ended in 1999.
National and investment banks, though, are the ones that have enjoyed this success, not the behemoth international firms such as HSBC that have simply proven too cumbersome to manage, the Economist explained earlier this year. The costs of global scale outweigh the benefits, it turns out:
The panic about global banks reflects their weak recent results: in aggregate the five firms mentioned above reported a return on equity of just 6% last year...
There is a growing fear that the costs of global reach — in terms of regulation and complexity — exceed the potential benefits.
It all seemed far rosier 20 years ago. Back then banks saw that globalisation would lead to an explosion in trade and capital flows. A handful of firms sought to capture that growth. ...
These giant firms proved hard to manage. Their subsidiaries struggled to build common IT systems, let alone establish a common culture. Synergies have been elusive and global banks’ cost-to-income ratios, bloated by the costs of being in lots of countries, have rarely been better than those of local banks. As a result these firms have all too often been tempted to make a fast buck.
HSBC, apparently, has not been able to resist that temptation. In case you've forgotten, former Attorney General Eric Holder was explaining why the Justice Department hadn't prosecuted HSBC for its alleged involvement with Mexican drug cartels when he famously said that some banks have become "too big to jail."
If the decision not to prosecute HSBC resulted from its importance to the global financial financial system, that choice looks questionable in retrospect. Maybe a criminal investigation by Holder's staff and the possible loss of HSBC's license to bank in this country would have been the straw that broke the camel's back, or maybe not. Its clear the firm has serious problems, apart from the actions of regulators here.
HSBC has run afoul of regulators around the world. "Explaining why the bank had failed to hit its previous return on equity target — set when Mr Gulliver took over in 2011 — the chief executive said the performance was undermined by $11.1bn of legal, regulatory and other charges, as well as rising compliance costs and higher capital requirements. HSBC has been hit by fines and compensation for a number of legal scrapes, including rigging foreign exchange markets, breaching US sanctions and money laundering rules, and mis-selling payment protection insurance in the UK." The Financial Times.
"'Cutting 25000 jobs is inevitable consequence of loss of our core business of money-laundering, tax avoidance and Libor manipulation' - HSBC" -- @davidschneider

Max Ehrenfreund is a blogger on the Financial desk and writes for Know More and Wonkblog.

November 13, 2012

CSI Gary Dourdan Files Bankruptcy } One Could Guess Why

*Former “CSI” star Gary Dourdan has given up trying to fight the banks.
The actor filed for bankruptcy on August 30th, reports TMZ. According to the docs, has a little over $1.8 million in assets, but owes his creditors $1.73 million.
A hefty portion of that debt, $1,689,704, is owed to various banks, including Union Bank, which apparently holds the mortgage on his home that may be in default.
His assets include $200 cash, $3,000 in a bank account, $4,000 in furniture, $200 worth of books, $1,500 in clothes, $500 in watches and a 2006 Dodge Charger worth $7,000, reports TMZ.

Dourdan says his disposable income is only $321 a month, claiming his bills ($14,562 a month) eat up just about all of the $14,883 he pulls in on average.
The actor is looking up, though. He says he “anticipates major acting roles” in the future, which can help pay off his debt. 

October 12, 2012

TD Bank DATA Breach 267,000 Customers


TD Bank misplaced computer back-up tapes containing personal information for 267,000 customers, including 73,000 in Massachusetts, the Massachusetts attorney general’s office said Friday.
The bank told customers that two tapes disappeared in transit while being shipped to one of its location in March. The company has not been able to find the tapes. The tapes were unencrypted and contained extensive customer information, including Social Security numbers and bank account numbers, the bank told the office of Massachusetts Attorney General Martha Coakley.
TD Bank, one of the largest regional banks in the United States, had previously refused to say how many customers may have been affected by the error.
TD Bank spokeswoman Rebecca Acevedo confirmed that the missing tapes included information about 73,000 customers in Massachusetts.
“We want to reassure people that there is no evidence that any of this data is being misused and that we continue to monitor customer accounts closely,” she said in a statement Friday.
Acevedo added that the bank is notifying customers. She said the bank waited more than six months to tell customers while it fully investigated the situation.
“This was an isolated incident,” she said. “We understand this is a difficult situation for our customers and apologize for the inconvenience.”

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