Financial Transparency Coalition

Swiss Leaks Findings Emblematic of Opaque System Illegally Draining US$1 Trillion Annually from Developing Economies

GFI: Bankers and Bank Executives Must be Held Accountable for their Behavior

WASHINGTON, DC – Leaked HSBC documents revealed today by the International Consortium of Investigative Journalists (ICIJ) highlight a culture of corruption in the international banking system that goes far beyond the world’s second biggest bank, noted Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization. Featured Sunday evening on CBS News’ 60 Minutes program, the files allegedly highlight how the Swiss branch of the bank meticulously catered to some of the world’s biggest dictators and criminals, and they are but the latest example of a global bank gone rogue.

“While the leaks do really expose a culture of corruption at HSBC, it seems almost unfair at this point to single them out,” said GFI Policy Counsel Joshua Simmons. “From Credit Suisse to UBS and BNP Paribas to Standard Chartered, it feels like nearly every major bank is either under investigation or subject to settlements for engaging in serious financial crimes. Even HSBC acknowledged in 2012 that it let US$200 trillion—roughly 3 times global GDP—flow through its New York office over a three-year period without applying the legally required anti-money laundering controls. Nevertheless, not a single bank employee or executive has been prosecuted in any of these cases. Until the U.S. Department of Justice—and financial regulators worldwide—begin holding individuals accountable for their actions, we’re going to continue living in a financial Wild West.”

GFI research estimates that opacity in the global financial system, consisting of tax haven secrecy, anonymous companies, trade-based money laundering, and lax financial crime enforcement, drains roughly US$1 trillion per year out of developing and emerging economies—more than these countries receive in foreign direct investment or foreign aid combined. Beyond bleeding the world’s poorest economies, this propels crime, corruption, and tax evasion globally.

“Illicit financial flows are the most damaging economic problem plaguing the world’s developing and emerging economies,” added Mr. Simmons. “But tax haven secrecy and lax enforcement also take a toll on developed countries like the United States, where offshore tax haven abuses cost American taxpayers roughly US$150 billion in revenue each year. Enough is enough: Now is the time for regulators and legislators to act.”

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Notes to Editors:

• Click here to read an HTML version of this press release on our website.
• Click here to read more on the Swiss Leaks files from the ICIJ.
• Click here to watch Sunday evening’s 60 Minutes segment on the files.
• Click here to read GFI’s latest annual global report on illicit financial flows, “Illicit Financial Flows from Developing Countries: 2003-2012,” published in December 2014.

Journalist Contacts:

Clark Gascoigne
cgascoigne@gfintegrity.org
+1 202 293 0740 x222 (Office)
+1 202 815 4029 (Mobile)