HSBC warns of economic risks of UK (The Guardian Weekly)

 

Pulling out of Europe

 

Britain's biggest bank is also considering moving its headquarters out of London. HSBC Britain's biggest bank, has issued a stark warning about the economic risks of the UK pulling out of the European Union as it revealed it was considering moving its headquarters out of London.

 Open quiz question

Match the items.
    1.biggest     a.risks
    2.out of     b.London
    3.a stark     c.bank
    4.economic     d.Union
    5.to pull     e.warning
    6.the European     f.out

   


 

The unexpected announcement of a full-blown review into where the bank should base its operations, just two week before the general election, was seized on by politicians on the campaign trail. HSBC said "regulatory and structural reforms" in the wake of the banking crisis had led to the decision.

 

 Open quiz question

Put the items in the correct order.
    The unexpected announcement
    of a full-blown review
    into where the bank should base its operations,
    just two weeks
    before the general election,
    was seized on by politicians
    on the campaign trail.

   

 Open quiz question

Put the items in the correct order.
    HSBC said
    "regulatory
    and structural reforms"
    in the wake of
    the banking crisis
    had led
    to the decision.

   

The chairman, Douglas Flint, also highlighted the economic uncertainty created by the risk of the UK leaving Europe – a blow to the Conservatives, who have pledged to hold an "in-out" referendum on the EU if they win the general election. HSBC has been hit hard the banking levy, which last year cost it $1.1bn (730m), up from $200m in 2013. Flint denied playing politics, adding the board only decided to launch the review on Thursday after pressure from shareholders. "How other people interpret it is up to them," he told reporters after the annual shareholders' meeting on Friday. Its shares jumped over 3% after the statement. The rise added almost 4bn to the value of HSBC – already one of the most valuable companies on the London stock market. Chuka Umunna, shadow business secretary, said the warning over EU membership showed that the Conservatives were irresponsible in "playing fast and loose with the UK's membership of the EU".

 Open quiz question

Match the items.
    1.economic     a.the general election
    2.the risk     b.from the shareholders
    3.a blow     c.politics
    4.an "in-out"     d.uncertainty
    5.to win     e.of
    6.hit     f.referendum on ....
    7.to play     g.to
    8.to launch     h.to them
    9.pressure     i.hard
    10.it's up     j.the review

   

 Open quiz question

Match the items.
    1.the annual shareholders'     a.market
    2.on     b.membership of the EU
    3.the shares jumped     c.over 3%
    4.one of the most valuable     d.playing politics
    5.the London stock     e.companies
    6.Shadow     f.Friday
    7.the warning     g.fast and loose
    8.to play     h.over EU membership
    9.the UK's     i.Business Secretary
    10.to deny     j.meeting

   

 

He said the bank would be expected to take account of the wider regulatory context when deciding where to base its business but the warning about the EU was a new dimension. The chancellor, George Osborne, said banks needed to be "properly regulated" but added that Labour's policies would drive businesses overseas. "If we proceed in this country with an anti-business set of policies we are going to drive companies abroad, we are going to see jobs lost," he said. The HSBC board – under fire after leaks of the tax avoidance strategies used in its Swiss arm – took the decision on Thursday night after returning from an informal meeting of investors in Hong Kong, its base until 1992. Shareholder after shareholder had asked whether London was the correct home for the bank. Flint said: "I said at our informal meeting in Hong Kong on Monday, we are beginning to see the final shape of regulation and of structural reform, including the requirement to ring fence in the UK.

 Open quiz question

He said the bank would be ___ to take account of the wider regulatory context ....
    a.expect
    b.expected
    c.expects

   

Open quiz question
The chancellor, George Osborne, said banks needed to ___ "properly regulated" ...
    a.be
    b.being

   

Open quiz question
.... but added that Labour's policies would drive ___ overseas.
    a.societies
    b.businesses

   

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"If we proceed in this country with an anti-business ___ of policies ....
    a.sets
    b.set

   

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.... we are going to drive companies ____, we are going to see jobs lost," he said.
    a.stranger
    b.abroad
    c.foreign

   

Open quiz question
The HSBC board – ___ fire after leaks of the tax avoidance strategies used in its Swiss arm – ....
    a.under
    b.on
    c.at

   

Open quiz question
(THE HSBC bopard ) took the decision on Thursday night after ___ from an informal meeting of investors ___ Hong Kong, its base until 1992.
    a.return - at
    b.returning - in
    c.returned - for

   

Open quiz question
Shareholder ___ shareholder had asked ___ London was the correct home for the bank.
    a.for - when
    b.with - why
    c.after - whether

   

Open quiz question
(...) the ___ shape of regulation and of structural reform, ___ the requirement to ring fence __ the UK.
    a.finally - included - for
    b.finals - includes - of
    c.final - including - in

   

 Open quiz question
Flint said: "I said ___ our informal meeting in Hong Kong on Monday, we are ___ to see ...
    a.at - beginning
    b.in - begin
    c.of - began

   

 

"As part of the broader strategic review taking place, the board has therefore now asked management to commence work to look at where the best place is for HSBC to be headquartered in this new environment. The question is a complex one, and it is too soon to say how long this will take or what the conclusion will be; but the work is under way." The bank usually conducts a review of its head office location every three years. But the last one was in 2010 and it has not conducted one since because of the regulatory reforms imposed on banks after the 2008 financial crisis. This included the reforms to ringfence high street operations from investment banking arms – the Vickers reforms – and George Osborne's bank levy. Flint added: "One economic uncertainty stands out, that of continuing UK membership of the EU. In February we published a major research study which concluded that working to complete the single market in services and reforming the EU to make it more competitive were far less risky than going it alone, given the importance of EU markets to British trade."

 Open quiz question

Match the items.
    1.the broader strategic     a.place
    2.the best     b.question
    3.this new     c.location
    4.a complex     d.on banks
    5.How long will it     e.reforms
    6.The work is under     f.review
    7.to conduct     g.take?
    8.head office     h.way
    9.regulatory     i.a review of ...
    10.Imposed     j.environment

   

Open quiz question

Match the items.
    1.financial     a.membership
    2.high street     b.market
    3.bank     c.study
    4.economic     d.risky
    5.to stand     e.uncertainty
    6.UK     f.trade
    7.a major research     g.operations
    8.the single     h.levy
    9.far less     i.out
    10.British     j.crisis

   

 

At the packed meeting Sir Simon Robertson, the deputy chairman, was forced to defend Flint and the chief executive Stuart Gulliver. "I want to make it absolutely clear the board has full confidence in both Douglas and Stuart and the rest of the management team." But shareholders registered their disapproval, with almost a quarter of them voting against the bank's remuneration report. On the head office move, one shareholder asked: "Which country are you likely to go to? How many countries have you not committed illegal behaviour in?" The bank employs 166,000 worldwide and about 48,000 are estimated to be in the UK, where HSBC moved its head office after the takeover of Midland Bank in 1992. Unions called for an urgent meeting to discuss the possible implications for staff. Flint also apologised for the scandals to hit the bank: "I and my colleagues understand your disillusionment, share your frustration at having been let down, apologise for the inadequacies in controls that allowed unacceptable behaviours to occur undetected and accept responsibility for restoring HSBC's reputation and standing to where they should be."

 

 Open quiz question

At the ___ meeting Sir Simon Robertson, the deputy chairman, was ___ to defend Flint and the chief ___ Stuart Gulliver.
    a.packing - forcing - execute
    b.packed - forced - executive

   

 Open quiz question

"I want to make it ___ clear the board has full confidence __ both Douglas and Stuart and the rest of the ____ team."
    a.absolutely - in - management
    b.absolute - on - manage

   

 Open quiz question

But shareholders registered their ___, with almost a quarter of them voting against the ___ remuneration report.
    a.disapproval - bank's
    b.approval - banks'

   

 Open quiz question

___ the head office move, one shareholder asked: "Which country are you __ to go to?
    a.At - like
    b.On - likely

   

 Open quiz question

How __ countries have you not committed ___ behaviour in?"
    a.many - illegal
    b.much - legal

   

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The bank employs 166,000 __ and about 48,000 are estimated to be in the UK, where HSBC moved its __ office after the takeover of Midland Bank in 1992.
    a.global - heads
    b.worldwide - head

   

 Open quiz question

Unions called for __ urgent meeting to discuss __ possible implications for staff.
    a.an - the
    b.the - a

   

 Open quiz question

Flint also __ __ the scandals to hit the bank: (...)
    a.apologise - to
    b.apologised - for

   

 

 

Flint has been on the board since 1995 and is facing scrutiny along with other directors about the activities in HSBC's Swiss banking arm between 2005 and 2007. Leaked account details showed how customers had been helped to avoid paying tax. This came after the bank was fined 1.1bn from the US authorities for money laundering offences. Flint said: "HSBC has paid a heavy price. Our reputation has been damaged and the financial burden of the unacceptable behaviour has been borne by you, our shareholders in fines, penalties, additional costs and the opportunity costs arising from diversion of management time - this is clearly wrong.

 

 

 Open quiz question

Put the items in the correct order.
    Flint has been
    on the board
    since 1995
    and is facing scrutiny
    along with other directors
    about the activities in HSBC's
    Swiss banking arm between 2005 and 2007.

   

 Open quiz question

Put the items in the correct order.
    Leaked account details
    showed how customers
    activities in HSBC's Swiss banking arm
    between 2005 and 2007.
    Leaked account details
    showed how customers had been helped
    to avoid
    paying tax.

   

 Open quiz question

Put the items in the correct order.
    This came
    after the bank
    was fined 1.1bn
    from the US authorities
    for money laundering offences.

   

 Open quiz question

Put the items in the correct order.
    Flint said:
    "HSBC has paid
    a heavy price.

   

 Open quiz question

"London is the world's leading financial centre [and] has improved __ a financial centre not least ....

   

 Open quiz question

Put the items in the correct order.
    Our reputation
    has been damaged
    and the financial burden of the unacceptable behaviour
    has been borne by you,
    our shareholders in fines, penalties,
    additional costs and the opportunity costs
    arising from diversion of management time -
    this is clearly wrong.

   

 

"As new regulation which will clarify individual responsibility is embedded and fresh legislation comes into force that will widen the sanctions available to address the most egregious behaviour, I hope we will see much greater individual accountability visited on those directly responsible."

Asked about HSBC, the prime minister, David Cameron said: "London is the world's leading financial centre [and] has improved as a financial centre not least by changing the way we regulate banks so that we wouldn't have to bail them out with taxpayers' money in future as the last Labour government had to do. "But it is an important reminder of how vital it is that we keep a pro enterprise, pro business, pro employment policy in our country. We need to keep taxes low, make this an attractive place to invest. All the time I have been Prime Minister that is what we have been doing, [with] record levels of inward investment coming here."

 

 Open quiz question

"As new regulation which will clarify individual responsibility is embedded and fresh legislation comes __ force ...

   

 Open quiz question

.... that will widen the sanctions available to address ___ most egregious behaviour,

   

 Open quiz question

... I hope we will see much greater individual accountability visited __ those directly responsible."

   

 Open quiz question

Asked ___ HSBC, the prime minister, David Cameron said: ....

   

 

 


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