Why investors don't care about the HSBC money laundering scandal

Not a massive deal.

HSBC are going to be fined up to $1bn for poor anti-money laundering controls in Mexico, which made it a conduit for "drug kingpins and rogue nations", according to a US Senate committee. Finding that a bank has lax checks on money laundering is nothing new - it happened recently at Coutts, but this time the revelation  “almost puts Barclays in the shade”, writes Nils Pratley at the Guardian.

Well, hardly.

Since the HSBC scandal emerged last week (in an internal memo), shares in HSBC have only dropped 3 per cent – compare this to the 17 per cent fall in Barclays shares since the fine was announced.

Although HSBC’s fine is certain to outweigh Barclays’, the markets have remained fairly unbothered for a few reasons.

First, HSBC’s misdeeds are somewhat overshadowed by the Libor scandal, and second, as detailed in the 340-page US Senate report, the news comes amid that of similar failures  by other banks.

“The senate chose to release HSBC [‘s fine] as a case study - Lloyds and Barclays have also been prosecuted and fined”, says Sandy Chen at Cenkos. He says that Lloyds was fined back in 2009, and Barclays in 2010, but the figures haven’t yet been released.

HSBC investors will also be reassured by the fact that the current HSBC chief Stuart Gulliver was not involved in the Mexican fiasco, where as Bob Diamond was very much at the scene of the Barclays Libor fixings.

Lastly, HSBC can put the problem to bed by simply paying the fine and complying with regulators, an option Barclays doesn’t have. Here’s Sandy Chen in a note:

“Because HSBC has cooperated with the US Senate investigation, and because it has begun to implement the recommended changes, we think that US legislators and regulators will be inclined to give HSBC some breathing space.”

HSBC. Photograph, Getty Images
Felipe Araujo
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Manchester's Muslim community under siege: "We are part of the fabric of this nation"

As the investigation into last week's bombing continues, familiar media narratives about Islam conflict with the city's support for its Muslim population.

“You guys only come when something like this happens,” said one of the worshippers at Manchester's Victoria Park Mosque, visibly annoyed at the unusual commotion. Four days after the attack that killed 22 people, this congregation, along with many others around the city, is under a microscope.

During Friday prayers, some of the world’s media came looking for answers. On the eve of Ramadan, the dark shadow of terrorism looms large over most mosques in Manchester and beyond.

“People who do this kind of thing are no Muslims,” one man tells me.

It’s a routine that has become all too familiar to mosque goers in the immediate aftermath of a major terror attack. In spite of reassurances from authorities and the government, Muslims in this city of 600,000 feel under siege. 

“The media likes to portray us as an add-on, an addition to society,” Imam Irfan Christi tells me. “I would like to remind people that in World War I and World War II Muslims fought for this nation. We are part of the fabric of this great nation that we are.”

On Wednesday, soon after it was revealed the perpetrator of last Monday’s attack, Salman Ramadan Abedi, worshipped at the Manchester Islamic Centre in the affluent area of Didsbury, the centre was under police guard, with very few people allowed in. Outside, with the media was impatiently waiting, a young man was giving interviews to whoever was interested.

“Tell me, what is the difference between a British plane dropping bombs on a school in Syria and a young man going into a concert and blowing himself up,” he asked rhetorically. “Do you support terrorists, then?” one female reporter retorted. 

When mosque officials finally came out, they read from a written statement. No questions were allowed. 

“Some media reports have reported that the bomber worked at the Manchester Islamic Centre. This is not true,” said the director of the centre’s trustees, Mohammad el-Khayat. “We express concern that a very small section of the media are manufacturing stories.”

Annoyed by the lack of information and under pressure from pushy editors, eager for a sexy headline, the desperation on the reporters’ faces was visible. They wanted something, from anyone, who had  even if a flimsy connection to the local Muslim community or the mosque. 

Two of them turned to me. With curly hair and black skin, in their heads I was the perfect fit for what a Muslim was supposed to look like.

"Excuse me, mate, are you from the mosque, can I ask you a couple of questions,” they asked. “What about?,” I said. "Well, you are a Muslim, right?" I laughed. The reporter walked away.

At the Victoria Park Mosque on Friday, Imam Christi dedicated a large portion of his sermon condemning last Monday’s tragedy. But he was also forced to once again defend his religion and its followers, saying Islam is about peace and that nowhere in the Koran it says Muslims should pursue jihad.

“The Koran has come to cure people. It has come to guide people. It has come to give harmony in society,” he said. “And yet that same Koran is being described as blood thirsty? Yet that same Koran is being abused to justify terror and violence. Who de we take our Islam from?”

In spite of opening its doors to the world’s media, mosques in Britain’s major cities know they can do very little to change a narrative they believe discriminates against Muslims. They seem to feel that the very presence of reporters in these places every time a terror attack happens reveals an agenda.

Despite this, on the streets of Manchester it has proved difficult to find anyone who had a bad thing to say about Islam and the city’s Muslim community. Messages of unity were visible all over town. One taxi driver, a white working-class British man, warned me to not believe anything I read in the media.

“Half of my friends are British Muslims,” he said even before asked. “ These people that say Islam is about terrorism have no idea what they are talking about.”

Felipe Araujo is a freelance journalist based in London. He writes about race, culture and sports. He covered the Rio Olympics and Paralympics on the ground for the New Statesman. He tweets @felipethejourno.

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