HSBC was found guilty of engaging in illegal money laundering last year. Concisely conclude, they helped clients bringing funds generated from drug trafficking and suspicious terrorists into the US economy. The aftermath of the scandal has been a painful experience not only to the directors or executives, but also to the stockholders as well as the general public.
In case to prevent the scandal could lose the bank business in the long-term, the ratings agency Standard and Poor’s has downgraded the outlook of HSBC from Stable to negative. As S&P said, “In recent months, the HSBC group has been censured by its regulators and other authorities for alleged control failing, notably with regard to US anti-money laundering standards”
Even though HSBC agreed to pay a billion dollar lawsuit, there is still a loophole. The ones who genuinely participated in the money laundering are not made personally liable for their own commitment of crimes. Also, there are no clear legal consequences to the senior management who have the responsibility of making sure the bank’s transactions are legal and ethical. The government should not overlook the importance of legality of transactions between financial institutions. It can be understood that in capitalist economies the governments prone to give a certain degree of freedom over the flows of funds. Meanwhile, great care should be taken over legality of transactions. The government is also responsible for striving a better balance between economic freedom and legality of transactions.
Business ethics can be considered in the dimension of social responsiveness, that is the organization must respond to the needs of community, therefore the management of HSBC could have adopted a process that is meant to define the actual tactics to be utilized in achieving its goals.
