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By Chris Vellacott and Lisa Jucca (Reuters)
Tax authorities in Europe should not buy stolen data to help find tax evaders in offshore centres, a top HSBC private banker said.
"It saddens me to think that any government would willingly pay for stolen information. No two wrongs ever made a right, at least that's how I was taught," HSBC Private Bank Chief Financial Officer Leigh Robertson told the Reuters Global Private Banking Summit in Geneva on Wednesday.
HSBC said earlier this year that a former IT employee at the bank had stolen data on up to 24,000 offshore client accounts in Switzerland, of which 15,000 were existing customers.
The details have since found their way into the hands of a number of tax authorities in Europe and many have launched investigations into people they believe may have held undeclared money in Swiss bank accounts at HSBC.
Other investigations are underway in European countries after Germany bought stolen data from Leichtenstein's LGT and more recently from Credit Suisse.
REGAINING GROUND
Robertson said HSBC lost private banking clients as a result of the theft, but had recovered much of the lost client assets this year.
HSBC Private Bank, which manages about $445 bln of assets globally, attracted 4.9 bln Swiss francs of new client money at its Swiss operations in the first half of the year, earnings statements show.
Robertson said the bank had put a lot of work into mollifying clients affected by the stolen data, some of which were difficult to track down since they had long left the bank.
"It has forced us to engage our clients," he said. "The reaction of the clients was mostly disappointed. Some just said fine, how did it happen, make sure it doesn't happen again."
The thefts took place as countries around the developed world heightened efforts to claw back tax revenues lost to offshore banking.
In a landmark case, U.S. authorities forced Swiss bank giant UBS to pay a $780 mln fine and disclose thousands of client account details.
New legislation pending the United States aims to place the burden of disclosure of details of U.S. account holders on foreign financial institutions, putting a 30% tax on their investments in U.S. assets if they do not comply.
Robertson said the legislation was "incredible" and said the most likely outcome would be to make financial institutions turn away potential U.S. clients.
"It will be difficult. The legislation I just find incredible. Everyone else in the world is being asked to do the policing for the U.S. government," he said.
"They are big enough, I guess, to put that kind of pressure on the rest of the world."
