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Andrew Tyrie MP
Andrew Tyrie, chair of the Treasury select committee, criticised HSBC over reports two of its directors threatened to quit. Photograph: Linda Nylind for the Guardian
Andrew Tyrie, chair of the Treasury select committee, criticised HSBC over reports two of its directors threatened to quit. Photograph: Linda Nylind for the Guardian

MP criticises HSBC for directors’ threats to quit over accountability rules

This article is more than 9 years old
Andrew Tyrie attacks bank for response to plans that could see managers jailed for up to seven years over reckless misconduct

Andrew Tyrie, chair of the Treasury select committee, has criticised HSBC in the wake of reports claiming that two of the bank’s directors had been “poised to quit in protest” at new Bank of England accountability rules that could ultimately see reckless managers of failed lenders serve jail sentences.

Tyrie feels the bank “failed to provide [a] balanced and full account” of the circumstances when reports of resignations surfaced two months ago. “Banks should certainly speak up when they think regulators are getting it wrong. But they should do so clearly and openly, and on the basis of the facts. To do otherwise gives the impression of bankers attempting to put pressure on regulators by the back door.”

His criticisms follow inquiries made of the bank’s chairman Douglas Flint after Sky News reported that “sources close to the situation said that the likely departures [of Alan Thomson and John Trueman] were a direct consequence of ... proposals to strengthen accountability for senior bankers.”

In a letter to Tyrie, HSBC chairman Douglas Flint insisted Trueman “had not resigned and is not about to do so” and that Thomson, who tendered his resignation in September, had done so mainly because his work burden had increased because of “expanded regulatory expectations of bank non-executive directors”.

Flint’s letter made clear that Trueman did harbour misgivings about the new accountability regime for bank directors.

The Bank’s paper, published jointly with the Financial Conduct Authority, proposed a “senior managers’ regime” with powers to jail top bankers for up to seven years for reckless misconduct. Board directors and top executives would be given clear responsibilities and would have to prove they were not aware of, or had challenged, improper behaviour.

Flint wrote: “It is the case that at the July meeting of the Bank [of England] board, John Trueman expressed strong concerns over the possibility of significantly increased liabilities for non-executive directors … and said that he would not be able to accept these, even if that meant he would have to step down.”

Flint said he had made relevant inquiries and was not aware of any press briefing on the matters.

Trueman has been a director of HSBC Bank for 10 years and was previously an investment banker. Thomson, a former finance director at Smiths Group, the engineering company, joined HSBC’s UK board in December.

The parliamentary commission on banking standards recommended a criminal offence of reckless conduct when it reported last year. Its findings reflected widespread anger that no top bankers have been charged or imprisoned for actions that made them rich but brought the economy close to collapse.

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