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
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Could Jeremy Corbyn still be excluded from the leadership race? The High Court will rule today

Labour donor Michael Foster has applied for a judgement. 

If you thought Labour's National Executive Committee's decision to let Jeremy Corbyn automatically run again for leader was the end of it, think again. 

Today, the High Court will decide whether the NEC made the right judgement - or if Corbyn should have been forced to seek nominations from 51 MPs, which would effectively block him from the ballot.

The legal challenge is brought by Michael Foster, a Labour donor and former parliamentary candidate. Corbyn is listed as one of the defendants.

Before the NEC decision, both Corbyn's team and the rebel MPs sought legal advice.

Foster has maintained he is simply seeking the views of experts. 

Nevertheless, he has clashed with Corbyn before. He heckled the Labour leader, whose party has been racked with anti-Semitism scandals, at a Labour Friends of Israel event in September 2015, where he demanded: "Say the word Israel."

But should the judge decide in favour of Foster, would the Labour leadership challenge really be over?

Dr Peter Catterall, a reader in history at Westminster University and a specialist in opposition studies, doesn't think so. He said: "The Labour party is a private institution, so unless they are actually breaking the law, it seems to me it is about how you interpret the rules of the party."

Corbyn's bid to be personally mentioned on the ballot paper was a smart move, he said, and the High Court's decision is unlikely to heal wounds.

 "You have to ask yourself, what is the point of doing this? What does success look like?" he said. "Will it simply reinforce the idea that Mr Corbyn is being made a martyr by people who are out to get him?"