HSBC Holdings plc 2023

Abstract

A string of misconduct scandals rocked the international capital markets following the global financial crisis in 2009. The daily $7.5 trillion foreign exchange market was not spared from these issues with the benchmark manipulation scandal publicly coming to light in 2013. In the latest round of repercussions, in 2023 HSBC Holdings plc (HSBC) was further fined by US regulators for employees inappropriately using unrecorded and unmonitored communication channels to conduct bank business. Jonathan Xu, Global Head of Non-Financial Risk, has been requested to respond on behalf of HSBC to the latest regulatory enforcement including signature actions that will be taken. Suggesting to shut the business is one possible route. Perhaps Jonathan can simply re-iterate to the regulators the measures HSBC has already taken to curtail the types of unethical behaviour highlighted. Alternatively, Jonathan can propose new or amended measures that could hopefully address their criticisms, especially that the tone at the top of HSBC is fundamentally rotten. Whichever path Jonathan chooses, he needs to convince the regulators that HSBC is indeed firmly committed to the business ethics agenda and be ready to respond to their questions. As the world’s largest trade finance bank by revenue and the third largest foreign exchange market participant, the conduct of how HSBC employees act in the market can significantly alter the outcomes of the clients they are engaged to serve as well as wider stakeholders of the organisation. Jonathan’s proposal will also need to persuade these stakeholder groups that business ethics equates to good business.

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