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Summary

  1. HSBC bosses face MPs over tax affairs
  2. HSBC apologise for bank's failings
  3. Chairman concedes list of problems is "terrible"

Live Reporting

By Chris Johnston and Katie Hope

All times stated are UK

Chris Johnston

Business reporter

That's all from Business Live today - thanks for reading. We're back at 0600 GMT on Thursday.

Petrobras shares drop

Petrobras HQ
Getty Images

Believe it or not, life goes on in the world outside the Treasury Committee room in Westminster. It has been another bad day for Brazil's state-run oil producer Petrobras after its shares fell about 6% in Sao Paulo following a downgrade by Moody's on Tuesday. The rating agency may downgrade the company further because of concerns over the recent

corruption scandal.

HMRC hearing

Edward Troup
BBC

HMRC's Edward Troup agrees that the recent publication of some of the information contained in the data stolen by Herve Falciani may have prompted the French authorities to grant HMRC permission to share it with UK law enforcement agencies.

HMRC hearing

VAT letter
Getty Images

Lin Homer tells MPs there is clear evidence of the effectiveness of "nudge letters" - sent to individuals or small businesses that HMRC suspects may not be paying all the tax they should. "We like people to pay their tax," she adds. And on a brighter note: "We think we are seeing significant changes in behaviour."

HMRC hearing

City of London police officer
Getty Images

HMRC has arranged a multi-agency meeting next week to discuss how the stolen HSBC Suisse data can be shared with them following the agreement with the French authorities announced on Wednesday. They include the Serious Fraud Office, Financial Conduct Authority, Crown Prosecution Service, City of London Police and the National Crime Agency.

HMRC hearing

Ms Homer says she doesn't think there will be many more successful prosecutions of individuals for tax evasion based on the list of 1,300 names, largely because of weaknesses in the data. There has only been one successful prosecution to date.

Via Twitter

HMRC hearing

HMRC tweets to confirm that the data stolen from HSBC by Herve Falciani can now be shared:

HMRC confirms HSBC Suisse bank data can now be shared with other law enforcement agencies and regulators:

http://ow.ly/JDQ3r #TSC

HMRC hearing

Lin Horner
BBC

Of the 3,200 people who were found to have a secret bank accounts, Lin Homer says that two thirds did not owe UK tax. However, the exercise has still generated £135m in revenue for the Exchequer. She adds that achieving prosecutions will be more difficult.

HMRC hearing

Edward Troup, HMRC tax assurance commissioner, explains that UK-Swiss tax agreement struck at the end of 2011 was intended to expose Britons who held secret Swiss accounts protected by strict Swiss law. It was distinct from the HSBC issue, he adds.

HMRC hearing

The UK tax system is "incredibly complex", Ms Homer says. She would like the code to be simpler but is not "holding her breath" for that to happen.

HMRC hearing

Ms Homer says French authorities have now approved use of the stolen Swiss data by HMRC more widely than originally permitted.

HMRC hearing

Lin Homer, chief executive of HMRC, is now giving evidence to MPs on the Treasury Committee about the stolen Swiss data.

HSBC hearing

That's it from HSBC. Stay tuned for Lin Homer, chief executive of HM Revenue and Customs, and two other officials who are set to be grilled next on why only one person has been prosecuted for evading tax.

HSBC hearing

Douglas Flint gives short shrift to Mr Mann's question as to whether he should have sacked Mr Gulliver: "I think Mr Gulliver is doing an outstanding job and I have every confidence in him as does the board."

HSBC hearing

Stuart Gulliver says the bank spends a total of £31m a year on advertising in the UK, of which £4.6m goes on newspapers. The most went to Metro, followed by the Evening Standard, Daily Telegraph, Times and Daily Mail.

HSBC hearing

Labour MP John Mann
BBC

Labour MP John Mann is incredulous that Mr Flint thinks the theft of the Swiss bank account details - which the HSBC chairman referred to earlier as "data theft" - is a bad thing. "Shouldn't you be pleased that regulators could find out what was going on?" he asks.

HSBC hearing

Douglas Flint says reports that Sue Shelley, the former head of compliance in Luxembourg at HSBC's private bank, was dismissed 18 months ago for raising concerns about tax-dodging are wrong. He asks for permission to write to the committee to explain why she really left in order to protect Ms Shelley's privacy.

HSBC hearing

HSBC logo
AP

Mr Flint says that when the Swiss bank account details were stolen, HSBC's first reaction was to examine the bank's data security processes. The MPs seem surprised that the first reaction was not horror at the tax evasion.

Via Twitter

HSBC hearing

Bloomberg banking reporter Richard Partington tweets:

Flint says "management on the ground" in Switzerland are "most accountable" for Falciani's data theft and behaviour at the unit

HSBC hearing

Douglas Flint: "The last time I got a bonus was 2010." He adds that he's waived bonuses three times in his HSBC career because he felt it was appropriate to do so.

Via Twitter

HSBC hearing

Guardian political editor Patrick Wintour tweets:

"We are suffering from horrible reputational damage" says Douglas Flint HSBC chairman, but it's all in the past and no one responsible.

HSBC hearing

Mr Flint reveals some of the details about its Swiss bank accounts were stolen during a systems upgrade intended to improve controls at the Swiss private bank.

HSBC hearing

Douglas Flint adds: "We know what we know. It's always possible that something will be uncovered somewhere else. I sincerely hope there are no more skeletons."

HSBC hearing

HSBC Chief Executive Stuart Gulliver (R) and HSBC chairman Douglas Flint (L) giving evidence at a Treasury Committee hearing
AFP

Clearly on a fishing expedition, Liberal Democrat MP John Thurso asks Mr Gulliver and Mr Flint if there is anything else they would care to disclose while before the committee. Mr Flint admits it is a question the HSBC board asks him on a regular basis, but declines to make any other revelations.

Via Twitter

HSBC hearing

BBC business editor Kamal Ahmed tweets:

HSBC's Flint: "I pay all my tax and I find it abhorrent that people don't"

Via Twitter

HSBC hearing

BBC business editor Kamal Ahmed tweets:

Flint: clients withdrawing large amounts of cash would be "a red flag today". "In Switzerland it was quite common."

HSBC hearing

An HSBC logo pictured behind the flag of the canton of Geneva at a Swiss branch of the bank in Geneva
Reuters

Mr Flint and Mr Gulliver are both initially stumped by the question of why a client would go to Switzerland to withdraw large amounts of cash from their accounts, rather than have it wired to them. "Some clients like to have a large amount of cash," Mr Flint eventually responds.

HSBC hearing

Mr Flint will not exclude the possibility of further problems emerging, saying the task of reforming HSBC will "always be ongoing".

HSBC hearing

Mr Tyrie reels off a list of failings that have afflicted HSBC, such as PPI mis-selling and alleged Libor manipulation. Mr Flint admits: "It's a terrible list."

HSBC hearing

Treasury Committee hearing
PA

Andrew Tyrie asks Mr Flint who is responsible for the acquisitions made by HSBC in the late 1990s that have since soured and thus should carry the can. Unsurprisingly, he doesn't take the bait.

Via Twitter

BBC business editor Kamal Ahmed tweets:

HSBC's Gulliver says he did not discuss Swiss bank issues with the Treasury.

Via Twitter

HSBC hearing

BBC business editor Kamal Ahmed tweets:

Douglas Flint: says he feels shame and will "take his share of responsibility" for Swiss private bank failings

HSBC hearing

Mr Gulliver adds: "The important point is I've paid UK tax on my HSBC earnings during that entire period [since being based in the UK], so the amount of tax I have paid is the fair and appropriate amount."

HSBC hearing

Mr Gulliver has "followed the letter of the law" of the UK non-domicile rules, he tells the committee.

HSBC hearing

Douglas Flint
PA

HSBC chairman Douglas Flint is now speaking and says "we are the most transparent in terms of remuneration" - a point Mr Tyrie concedes.

HSBC hearing

Stuart Gulliver
BBC

Mr Gulliver is explaining his financial arrangements to the committee, which he says reflected a desire for privacy from his colleagues at HSBC in Hong Kong. "There was no tax purpose to it."

HSBC hearing

Committee chairman Andrew Tyrie begins by asking Stuart Gulliver about his "extraordinary" tax arrangements. The chief executive begins by apologises to the public and shareholders for the "unacceptable" actions that he admitted had damaged the bank.

HSBC hearing

The hearing had been due to start at 1415 GMT but the two HSBC executives are not yet in the committee room. Correction - they've just arrived.

HSBC hearing

Stuart Gulliver and Douglas Flint are being grilled after it emerged earlier this month that the Swiss unit of HSBC helped wealthy clients evade hundreds of millions of pounds' worth of tax. Senior UK tax officials will also answer questions at the hearing.

Chris Johnston

Business reporter

Good afternoon and thanks to Matthew West and Tom Espiner for this morning's coverage. Myself and Katie are primed to bring you the highlights from the Treasury select committee hearing where HSBC's two top bosses are set to be given a rough ride by MPs.