Forum Post: Is HSBC a bad bank? Considering moving from Chase
Posted 12 years ago on Nov. 23, 2011, 11:42 p.m. EST by NJawny
(14)
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I believe moving your money out of the bad banks is an important part of this movement and I have yet to do so myself. Living in NY I feel it is harder than in most places to use a credit union so I have considered HSBC. Does anyone know if they are involved in derivative gambling or other unethical dealings?
HSBC is a horrible bank. Their customer service sucks unless you are a business. Also, they gave information on one of my former clients to the FBI (for a charge he was later cleared of) before the FBI even obtained a warrant. If you happen to be a large corporation with lots of money, they are great. Otherwise, they're Citibank's lesser known cousin.
The Treasury department of every competent bank utilizes derivatives to hedge their risks. This is neither "gambling" nor "unethical".
I'm referring to banks that make leveraged bets with depositor's money. If they have $1 in deposits they may make a $10 bet that someone won't be able to pay their mortgage. This is gambling (and provides not value) and it's gambling money they don't have (hence the reason for a bailout). I may not have used the correct terminology but I was referring to this type of business.
You're referring to leverage. Hedge funds, investment banks and other types of investment firms practice this to varying degrees.
Retail banks are precluded by law from taking depositor's money and using that money in proprietary trading. In fact there are limits on how much of their own money they can use for proprietary trading.
If you travel outside the country a lot, it's a good bank.
just so you can compare. In this table you can see that HSBC is the worst outta 3 well known banks. See how much is the interest rate for Purchases (P) and Cash Advances (CA):
Bank of America: P = 10.24%; CA = 19.24% Chase: P = 14.24%; CA = 23.24% HSBC: P = 19.99%; CA = 28.99%
All big banks take part in that sort of stuff. Your best bet other than a credit union is a community bank. Use the link below to find a community bank. Just choose "bank" and enter your zip code. Remember to open your new account first before going through the closing procedures. The website also has steps on how to transfer your money.
http://moveyourmoneyproject.org/find-bankcredit-union
I would be careful on community banks. Once fully moving to North Carolina, I couldn't use the local credit union until I got a driver's license. I have that now, and I am preparing to move from the community bank to the credit union.
The strange thing is that I had no trouble with United Community Bank for the year I had the account, until now. I just received a letter with the statement that they changed my account to a "relationship account," and that if I don't keep $500 or more in the account, I will be charged an $8 maintenance fee. I do suspect that they may not be a true community bank, and simply use the word in their name. I don't know. What I do know is that when I leave, I am going to tell them exactly why and that I am a proud supporter of OWS.
I certainly hope credit unions don't do this, because that's not fair to those in an area where the average income level is below poverty level. In fact, it's not fair to anyone.
That does sound horrible and you should definitely move to a credit union in that case. As far as I know my community bank does nothing of the sort and I think yours is a specific situation that doesn't usually occur within community banks. In any case, you should do lots of research before picking any institution whether it be credit union or community bank.
Occupy wallstreet is against FED and wall-street firms including those banks that participate in funding politicians. When comparing between chase and HSBC , HSBC is definitely better choice. However all banks registered in USA whether local or foreign participate in FED's fractional lending. Which means they lend the money out of thin air. Credit unions do not participate in fractional lending hence they lend real money it has available to lend. I am not aware of any major unethical dealings of HSBC in USA and know that they made losses on mortgages like other banks. With all the financial crises going, I suggest keeping money in local in credit union as its very easy for HSBC NA to shut their branch any day they feel (hopefully not in Newyork, NY).
As for "fractional lending", banks have regulatory capital ratios under the Basel II accords, which mitigates their liquidity risks of their dollars lent vs their dollars in deposits.
To your last point, if HSBC closes, your deposits are insured under the FDIC (up to $250k)
Even credit unions have their deposits insured upto same limits as banks. The point you have to understand is that credit unions are democratic. The members of credit unions can vote to appoint their executive. You cannot do that with banks and thats the reason if bank does something wrong , you have no way to check the fraud. Go with credit union or cooperative banks as the members can vote and prevent wrong from happening.
Publicy traded corporations are (in theory at least) somewhat democratic as well. As a shareholder you vote on board members. The board in turn then oversees executive hiring, executive compensation and high-level corporate strategy. In reality, of course, your vote as an individual has no effect, and boards often have their own agenda without shareholder interests necessarily as their top priority. Personally, though, I don't really see how the right to vote for some credit union executive really is any big impetus to move to a credit union.
HSBC is pretty solid. In fact if you look at Hong Kong money (HKD) you will find the HSBC printed on it. They are an investment bank, but I trust them over B.O.A.
They're not only an investment bank -- also a commercial bank, retail bank and private bank.
Doubtful HSBC could be as big or as competitive if they didn't have diversity in their business model. I'm with you on the whole demonizing banks question. I've never seen a person pissed off at a bank the day their mortgage or loan is approved. I like HSBCs Premier account. I don't have one yet, but will in the next couple of years.
btw -- I don't work for HSBC... but I do work for a bank.
I find it almost comical how ignorant all the Occupy people are when it comes to blindly demonizing banks -- when in fact they really know nothing about the banking industry.
Ditto for Wall Street.
Nothing blind about it, banks have earned their criticism and it is not just OWS that is fed up with the banks. Do you remember the crash/bailout of '08 or was that a dream? Maybe I should go gambling and buy some politicians so I can get a bailout and bonuses when I lose.
TARP was complicated. It was essentialy the lesser of two evils. Some institutions at the time really were "too big to fail" and would have brought the global economy to a grinding halt without the bail-outs. The excessive bonuses were appalling -- but frankly the bonuses of some senior level banking execs really has no effect on my life, so I'm not losing sleep over it.
The only banks that I would put more trust in would be cooperative banks, such as the National Cooperative bank, and credit unions. If I had to second choose, it would be either community or mutual savings banks. If I had to use anything else, it would have to be out of necessity.