HSBC chairman Stephen Green said the US sub-prime crisis has forced banks into a ‘profound and secular’ rethink of their lending practices. That is a good idea that we have been harping on since the 1990’s. The United States government was harping on it too, leveling charges of predatory lending against Household International and Ameriquest. Mr. Green is discovering that Americans can say “NO” and “Enough is enough.” As if it is a new and startling revelation, leaders in London still do not have a clue about HSBC Finance and the way they operate. It is part of the HSBC ‘don’t ask – don’t tell’ leadership. Allow me to explain how HSBC ran into trouble:

- If you lend to someone and then send their job to India you might have a problem
- If your employees lie about the loan and expect to collect on it you might have a problem
- If you demand huge bonuses for executives and scale back employee benefits you might have a problem
- If you loan to people that cannot possibly repay you might have a problem
- If you think people with poor credit do not suffer more than others you have a problem
- If you think high gasoline prices will not make more people give up you are mistaken
- If you think a loan where the balance never goes down is good for your own mother you are wrong
- If you think selling CDO’s is more important than a decent loan you are wrong
- If you think insurance packing is good for your customers you might have a problem
- If you think employee loyalty is driven by pay and bonuses alone you might have a problem

Green added that the authorities would have to stamp down hard on the ‘clear evidence of market manipulation’ that have emerged over recent months. BEWARE! When the stomping starts there is nothing to keep a big foot from stomping on HSBC Finance and HSBC USA, so be very careful about what you ask for.

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