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HSBC Bank Acknowledges More Work Needed To Stop Bad Actors

HSBCHSBC chairman Douglas Flint has acknowledged that the bank needs to do more to identify bad actors in the organization and protect the financial system. He said this in a recent annual general meeting held recently for the Britain’s biggest bank where things got a little heated.

Speaking on the Panama Papers leak, Flint said that only 5 percent of the 2,300 entities created by HSBC and its affiliates were still operational. He emphasized that it was not possible to open such accounts today without adequate disclosures.

The leak of 11.5 million documents from the Panamanian law firm Mossack Fonseca has sparked questions on financial dealings of individuals who use offshore havens to hide wealth and depend on banks and financial institutions to act as middlemen.

According to Flint, most of what the documents revealed were transactions carried out when rules and regulations were more relaxed. He said that HSBC was today doing everything to ensure that its customers were in line with standards implemented recently for regulatory compliance and tax transparency. He added that the bank was releasing those customers who were unable or unwilling to be fully compliant with these requirements.

In a statement Flint said,

We are committed to working with the relevant public authorities to fight financial crime and keep criminals out of the financial system. However, he admitted there was more to do. We are, however, not yet where we need to be…HSBC’s determination to address emerging risks and enhance our ability to identify bad actors remains resolute

Shareholders voted Douglas Flint back as the chairman of the bank although only for a year as he had previously announced that he will be leaving the bank in 2017. The shareholders also passed the pay report for 2015 without any opposition after the bank announced a cut in the salaries to the extent of 7 percent. The report was passed with 90 percent approval as against last year when it received approval of only 24 percent.

Chief executive Stuart Gulliver’s salary was reduced to £7.3 million in 2015 while his variable pay was reduced to £3 million, a reduction of £361,000 ($513,000). This is his lowest compensation since 2011 when he took over as the CEO.

The pay report also approved proposes to defer variable pay for top executives for three to seven years and reduce the cash given instead of pension to 30 percent of salary from 50 percent.

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