Swiss Investigation on HSBC Intersects Fight for Glass-Steagall

The raid of the HSBC Swiss headquarters in Geneva has put the spotlight on institutions which have covered up for HSBC. The same institutions, such as the Swiss Market Supervisory Authority (Finma), have been part of the opposition against the initiative for Glass-Steagall modelled banking separation in the Swiss Parliament.

In the past years, Finma had conducted three investigations on money-laundering in HSBC, all concluded with zero results. Former prosecutor Dick Marty said that Finma was unable to see “an elephant walking in front of it” in an interview with Le Courrier and La Liberté.

Finma is inactive when it comes to a “giant fraud” but nasty with small violations. A committee of the Council of States (Ständerat) has requested a meeting with the Finma for clarification. Finma is known for having first introduced in Europe a bail-in regulation. In the financial daily {Neue Züricher Zeitung} on May 4, 2013, the two Finma officials who drafted the regulation explained that, among other things, the bail-in could prevent separation of banking activities. One of those two officials, British subject Mark Branson, is today CEO of Finma and was part of the “Experts Group” that drafted the “No” to bank separation report for the Swiss federal government.

The spotlight is also on Swiss Attorney General Michael Lauber, who should have started an investigation immediately after the revelations, but who claimed that he couldn’t, because the HSBC data had been illegally obtained. Geneva prosecutors, however, had another view and finally moved.

Swiss television journalist Marianne Fassbind complained that “Switzerland has not been pro-active, but has acted upon pressure of third countries.” It is known that France has already concluded an investigation against HSBC and that Germany, the U.K., Belgium, and the U.S.A. have ongoing investigations. The probable explanation is that Lauber is “the Swiss Loretta Lynch.” A man of the “finance industry,” he has been for years head of the Liechtenstein Bankers Association (2004-2010) and before that, he led the Lichtenstein Financial Intelligence Unit. Eventually he became head of the Lichtenstein Financial Market Authority (2010-2011).