The HSBC rebrand is like Coca Cola changing its name to 7UP

HSBC Rebrand = Hide Scandals, Become Credible? The bank may be about to stage a massive disappearing act.


What’s the story?

HSBC Rebrand; Jack Black leans on a counter "Buh Bye"

HSBC HQ may leave the UK

Big bank HSBC is getting rid of 50,000 staff members across the world; 8000 of these from the UK.

Instead of face to face contact, customers can look forward to more online banking and “self-service”. We’re hoping self-service means you can just help yourself to money whenever you like.

HSBC is also reviewing whether they should move their HQ out of the UK.  The bank’s UK branches are going to be re-branded under a different name. Ooh, fancy.



Don’t bankers like the UK? Surely the weather makes it worth staying?

HSBC rebrand; rain on a window with a gloomy background

With weather like this why would you want to leave?

HSBC stands for Hong Kong and Shanghai Banking Corporation. It was founded in Hong Kong in the 1860s.  HSBC only moved across to Britain in the 1990s when they took over the UK’s Midland Bank.

Most of HSBC’s money comes from trading in Asia. At present they are losing money in the UK because of the Bank Levy. This taxes big banks on their profits and hit HSBC hard last year. They had to fork out £750 million to the tax office. Ouch.

So… it might make sense for HSBC to go home to Asia. But don’t panic HSBC customers; no decisions have been made yet.

HSBC decoded: If HSBC leave it will be a big blow for the government’s money-man; Chancellor George Osborne. He’s been struggling to keep banks and big businesses happy in the UK. Everyone worried about businesses leaving because of the EU referendum. If they do, it could damage the UK economy and mean fewer jobs and dollar for everyone. HSBC’s decision could be crucial.


What’s going on with UK branches of HSBC?

HSBC’s UK high street branches are to be “ring fenced”. This means people’s deposits and mortgages are separated from the bits of HSBC that trade on the financial markets. The idea is that by keeping them separate your money is safer. These rules were brought in after the financial crisis.

The HSBC rebrand means UK branches will launch under a different name. For the banking world this is like Coca Cola changing its name to something like Lilt or 7UP. It may be big news but the product being sold is still a fizzy drink. Change the name of a bank… and it’s still a bank.


So what’s the deal with the HSBC rebrand?

HSBC rebrand; A woman stands in front of a blackboard "I dont do taxes"

HSBC helped clients hide money from the taxman

The press has reported several scandals involving HSBC in the past few years.

The Guardian reported HSBC’s recent fine for money laundering charges. Money laundering takes money gained illegally (e.g. drug money, stolen cash) and makes it look as though it was obtained legally.

HSBC’s Swiss branch was supposedly also found to have helped people avoid paying tax by hiding their income from the tax man.



This doesn’t mean all bankers are crooks, but it definitely wasn’t good press for HSBC. Is the planned HSBC rebrand an opportunity to distance themselves from the bad vibes? Not according to them:

“We will operate with a different brand name… The reason for doing it is actually so that clients are aware whether they are dealing with the ring-fenced bank or the non-ring fenced bank. Obviously if both are called HSBC it’s a bit confusing… It’s more about clients being able to work out which one they are dealing with than it is about anything else.”  – HSBC Chief Executive Stuart Gulliver, speaking at a HSBC investor update.


What we learned; no amount of rebranding can make corporate finance cool.

HSBC rebrand; what’s better saving money or job losses?


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“If you ain’t cheating, you ain’t trying” – Banks in Foreign Exchange Scandal

The Foreign Exchange Scandal: If you’re going to break the law, probably best not to email about it. Several big banks have been hit with record fines totalling $5.7 billion after it was revealed they had fixed the foreign exchange markets to make profit.

What is the foreign exchange and how does it work?

Foreign Exchange is the conversion of different currencies. Changing one countries money into another. The value of a country’s currency is determined by things like trade, investment and tourism and what’s going on in the country at the time (I.e. things like war tend to have a negative affect).

How other countries are doing also effect this. Most countries “float” their currency on the market against other countries – which basically means the value of their currency is affected by how well the other countries are doing and also by trading in the Foreign Exchange (Forex) Market.

Foreign Exchange is handled by big international banks. Traders buy and sell currencies on behalf of clients. Foreign exchange enables international trade and investment from one country to another.

E.g A car company from one country imports car parts from another country. The parts that are being bought, must be purchased in the currency of the country that the car parts belong to. Foreign exchange traders will assist the car company with the exchange. The international banks make money off of this exchange.

Their aim: Finish the day with more money than you started. As the value of currency continually rises and falls, if you are clever (and sometimes just plain lucky) currency traders make a lot of profit on these trades.

Foreign Exchange Scandal - The stock market goes into meltdown

Foreign Exchange Scandal – the markets can be manipulated…


What did the banks do?

A group of traders decided they wanted to make even more money than usual and decided to play against the rules.

It is possible to “fix” the market in order to make a profit. This is illegal.


Foreign Exchange Scandal - A scene from the film Wolf of Wall Street where Leonardo DiCaprio's character speaks to camera

Foreign Exchange Scandal - A scene from the film Wolf of Wall Street where Leonardo DiCaprio's character speaks to camera


Here’s how it works:

The market runs 24 hours a day so it’s very difficult to see how much things are worth at any given time. To make it easier to know the value of things a picture is taken of how the market is doing. Before the scandal this was done 30 seconds before and after 4PM and was known as the 4PM fix or fix window. 


Traders can affect market prices but placing lots of orders just before the 4PM fix. More orders changes the price value as the demand for a particular product has risen.

If you know an event like this is going to happen you can place your own orders and sales earlier in the day and make a profit when the price changes later on. Buy it while it’s cheap and then drive the price up, for example.

However trades made on their own don’t really make much of a difference to the market as there’s so much going on – you need a rush of similar trades with many people working together.


And that’s what members of the banks did. In one case HSBC traders worked with three other firms to drive the sterling-dollar rate lower. For those that don’t speak City talk: that’s the difference in value between the Pound and the Dollar.

They used confidential information from their clients to manipulate the market, making HSBC a tidy profit of $162,000.


Foreign Exchange Scandal - A scene from a film shows Tom Cruise hugging his friend

Foreign Exchange Scandal – $162,000.. not bad for a day’s work


It’s probably worth saying – buying currency you know is going to rise is not illegal. This is called “front running” and is legal in the foreign exchange market because it was thought no single trader could affect the market enough to make a profit. But colluding (coming to a secret understanding) with others to make it happen definitely is illegal.


If you’re going to break the law – don’t email about it

These emails have a nasty habit of coming back to haunt you.

The traders, who called themselves “the three musketeers”, “the players” and “the A team” sent a series of messages via email and online chat rooms after manipulating the markets:

“Loved that mate… worked lovely… pity we couldn’t get it below the 00”, “Hooray nice teamwork” and of course “If you ain’t cheating, you ain’t trying”

The banks involved in the scandal were JP Morgan, Barclays, Citigroup, RBS and UBS, just in case you were wondering.


What people are saying about the Foreign Exchange scandal?

The movements in the market are so small that if you’re exchanging money for a holiday you probably won’t notice what’s happened.

However that didn’t stop people getting very angry:







Foreign Exchange Scandal - Comedic Actor Stephen Fry makes an angry comment "You corrosive lump of fecal horror"

Foreign Exchange Scandal – This sums up the mood of the day


What happens now?

As a result of the scandal the 4PM fix window is being extended to five minutes, rather than 30 seconds. This should in theory make it a lot harder for traders to try to fix the markets.

In this case the biggest losers were the banks who will plead guilty to criminal charges and face the hefty fine. Also some of the employees involved in the Forex Scandal are now being sacked. Despite the punishments, events like this don’t make the banks look good and many of the public are wondering “Will they ever learn?!”

Foreign Exchange Scandal - Rupert Grint sits angrily; the word rage flashes in different colours

Foreign Exchange Scandal – People are not happy about this