Lord Howarth of Newport
Main Page: Lord Howarth of Newport (Labour - Life peer)Department Debates - View all Lord Howarth of Newport's debates with the HM Treasury
(9 years, 6 months ago)
Lords ChamberMy Lords, the noble Lord asked about civil as opposed to criminal penalties, and whether an exemplary hanging might not be a good idea. I explained the difficulties about prosecutions in this case, but we have successfully prosecuted people for LIBOR manipulation and we have extended the scope of the criminal law in respect of people in senior positions in banks. The noble Lord will probably have seen that the very threat of criminal action against directors of banks, even though pretty remote, has made a number of non-executive directors of banks extremely nervous.
My Lords, anybody who knows the noble Lord, Lord Green of Hurstpierpoint, as many of us in this House do, knows that he is a person of the utmost integrity and great ability. Do not these revelations about HSBC, profoundly shocking as they are, demonstrate two things, among others? The first is that enormous international conglomerates such as HSBC are impossible to manage as they need to be managed. Secondly, does not this revelation demonstrate the cultural change wrought by the neo-liberal orthodoxy which has been dominant during recent decades and under which personal material self-seeking has been elevated far too far above other values?
My Lords, if noble Lords have read the statement by HSBC in today’s Guardian—it may be in other newspapers, but that is where I read it—they will have seen that it is clear that, in 2005, HSBC was run as a very loose confederation and that the centre sought not to exercise very great control. That has changed very dramatically, and the new regulatory authorities are much more intrusive in ensuring that management at the centre has effective control throughout the organisation. It is clear that there was a wholly unacceptable culture in many of the banks. Both regulatory and legal change and activities by the banks in setting up their own body to monitor standards—as well as statements by senior management at the top of banks—are trying to reverse that culture towards the kind of culture that I suspect most people would expect their bankers to follow.