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Tuesday, August 05, 2014

HSBC Staff Turn To Unnecessarily Safe Activities


Douglas Flint, the chairman of HSBC, has expressed concern that increased regulation of the banking industry is pushing staff to turn to unnecessarily safe activities.

He is quoted by the Telegraph:
Unwarranted risk aversion threatens to restrict access to the formal financial system to many who could benefit from it.

There’s a creeping concern that staff are concerned about the penalties for getting things wrong and building risk aversion… getting to a state where there’s a zero risk tolerance.”
Flint expressed his opinion following HSBC's results, which saw a 12% fall in first half profits to £7.3BN.

As is the nature of any post binge clean up, the pendulum often swings too far the other way.

However, Flint may care to remember that these regulations (whether they are excessive or not) came into being because of the activities and risk appetite of the banks and their staff.

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