HSBC Boss Says Government Bailout Could Encourage Reckless Banks
HSBS is the world’s fourth largest bank and responsible for many UK mortgages and yesterday, its Chief Executive warned that the bailout from the government, worth £37 billion, could lead us back to the days of reckless banks and finance houses.
Michael Geoghegan stated that the HSBC’s more conservative stance in recent years has been criticised by its shareholders and yet had given them a stable base with which to survive the current crisis. Other banks who had been reckless had consequently been punished by the markets and yet their actions were rewarded by a bailout from the government so they did not have to face the consequences of their actions.
Mortgage lender HSBC recently announced only a small dip in their profits and maintained both their dividends and a strong financial position. Many of their rival banks and mortgage lenders have only survived thanks to the government bailout.
Posted on November 11, 2008
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