The chief executive of the Prudential Regulation Authority has warned HSBC’s senior management that he will hold them personally responsible for reforming the bank.
Speaking to the Treasury select committee, Andrew Bailey said HSBC’s chief executive Stuart Gulliver and its chairman Douglas Flint could not delegate responsibility for making the bank’s structure less complicated.
This came after allegations that the bank’s Swiss division helped people avoid tax.
He said: “It is very clear to me that this question of being too complicated to manage has to be dealt with, and we have been very clear with HSBC over a number of years about this.
“My view is that the current management has set about this task. We have strongly encouraged it, and I can tell you that as a prudential regulator we are holding Stuart Gulliver and Douglas Flint responsible for delivering that process.”
Mr Bailey went on to say that he found it “inimical” that there would not be an allocation of responsibility at the bank.
He said: “I am a chief executive. We all delegate work – it would be crazy if we didn’t – but you cannot delegate responsibility.
“I believe that fundamentally and I think that’s absolutely consistent with the goal and purpose of the senior managers’ regime.
“That’s why I am so committed to enacting it and making it successful.”
The senior managers’ regime will come into force on 7 March 2016 to hold leading figures in banks, building societies and designated investment firms to account.
Simon Webster, managing director of Kent-based Facts and Figures, said: “There is an old saying that delegation is not abrogation, but unfortunately that’s what happens in most large companies.
“What angers many small practitioners in financial services is that the banks are so big yet no single person appears responsible for mistakes, but if a small IFA falls over they lose everything.”