MercoPress. South Atlantic News Agency

Argentina's central bank and foreign private banks clash over removal of HSBC directors

HSBC president Gabriel Martino and deputy Miguel Angel Estevez were forced to resign by the central bank in relation to money laundering and Swiss accounts

Argentina's Central Bank and the Argentine Banking Association (ABA) exchanged fierce criticism on Wednesday after the decision of the monetary authority to remove the licenses of two senior HSBC directors, who will be forced to leave their posts.

 According to the chamber, which represents overseas banks in Argentina, the resolution “will have serious consequences because it unfairly affects one of its associates and its directors.” The ABA was responding to the punishment handed down on HSBC president Gabriel Martino and deputy Miguel Angel Estevez, related to the investigation into money laundering and 4,000 Argentine-owned accounts based in the bank's Swiss branch.

The Argentine Business Association (AEA) also lent its weight to the criticisms. “[The measure] was adopted without allowing those affected to make us of their right to defend themselves in court,” the entity claimed, adding that it was “concerned” by the measures taken by the Central Bank, run by president Alejandro Vanoli.

The body additionally pointed out that it had previously supported former CEO of Citibank Gabriel Ribisch, who suffered a similar punishment due to an agreement struck between the bank and the investment funds.

Nevertheless, the Central Bank responded by confirming its decision and reiterating that the bank must immediately designate a new president and vice to replace Martino and Estevez.

“Once more, the corporation of foreign banks seems to pursue the goals of a weak supervisor to leave financial service users helpless, those who without effective intervention from the Central Bank would be exposed to murky behaviours from the administrators of those financial entities,” the institution fired in reference to the ABA.

“It is not true that in this case constitutional guarantees of due process and defence in court have not been respected, as administrative and judicial options exist to defend the rights considered affected”, said a release.

Likewise Argentine Cabinet Chief Aníbal Fernández praised the decision by the Central Bank (BCRA) to revoke the license of both the president and vice-president of the local branch of the HSBC bank, accusing them of failing to prevent money laundering and tax evasion operations.

“The Central Bank has an additional duty regarding the control of public and private entities. There is no option to manage a bank the way one wants, it has to be done in accordance with the legislation,” the head of ministers told reporters this morning at the government house.

“If (law) was not complied with and money laundering was facilitated, the BCRA has all the right to request to remove (the authorities of the HSBC),” Fernández added.