The important aspect of this is that George Osborne warned the US off prosecuting HSBC when the UK government already knew that the bank was helping thousands of wealthy clients to dodge tax.
Perhaps Mr Osborne was worried that any evidence of financial wrong-doing might reflect poorly on the Conservatives? After all, former HSBC boss Stephen Green was a Tory peer by the time of the US investigation.
The US government decided not to pursue criminal charges against HSBC for allowing terrorists and drug dealers to launder millions of dollars after George Osborne and the UK banking regulator intervened to warn that prosecuting Britain’s biggest bank could lead to a “global financial disaster”.
On Monday, a congressional report published letters and emails from Osborne and Financial Services Authority (FSA) officials to their US counterparts warning that launching criminal action against HSBC in 2012 could have sparked a “financial calamity”.
The House financial services committee report said the UK interventions “played a significant role in ultimately persuading the DoJ [Department of Justice] not to prosecute HSBC”. Instead of pursuing a prosecution, the bank agreed to pay a record $1.92bn (£1.4bn) fine.
The report revealed that Osborne wrote to Ben Bernanke, who was then the Federal Reserve chairman, and Timothy Geithner, the then treasury secretary, to warn that prosecuting a “systemically important financial institution” like HSBC “could lead to [financial] contagion” and pose “very serious implications for financial and economic stability, particularly in Europe and Asia”.
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