This article is taken from the February 2023 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issues for just £10.

It would be hard to invent a more contrasting pair of protagonists for a thriller plot than Stephen Green and Joaquin “El Chapo” Guzmán. Green — tall, soft-spoken, cerebral, an Anglican priest in his spare time, later a trade minister in the House of Lords — was chairman from 2006 to 2010 of HSBC, the UK-based bank which grew to be the world’s largest during his tenure. Guzmán, now incarcerated for life in one of America’s most secure prisons, was the small, cunning and murderous head of Mexico’s Sinaloa drug cartel, one of the world’s most sophisticated ventures in the distribution of cocaine, heroin and other narcotics. Remarkably, Guzmán was one of Green’s biggest HSBC customers.

In a very indirect sense, of course. The plain truth — told in Too Big To Jail with pace, gusto and a strong sense of moral outrage by veteran City journalist Chris Blackhurst — is that after HSBC acquired a Mexican subsidiary in 2002, its business there grew at a phenomenal rate on the back of Sinaloa’s billion-dollar cash flows from the United States. These were sometimes deposited in containers so large that the bank’s counter-screens had to be altered to accommodate them.

Most senior executives sailed on with their careers unstained

The money was then laundered into legitimate accounts, many of them in an entity labelled “the Cayman Islands branch of HSBC Mexico”, which did not even have a physical presence in Grand Cayman, but existed only as an accounting device within the bank’s Mexico City headquarters.

These facilities enabled Guzmán’s organisation to prosper in its business of dealing deadly drugs to American users whilst assassinating any competitor or official brave enough to challenge its monopolistic misrule. HSBC’s breathtakingly slack anti-money laundering procedures and checks on dubious account-holders did nothing to impede its growth.

The Mexican authorities eventually nabbed El Chapo — despite several Keystone Cops near-misses and one spectacular prison break via a mile-long tunnel — and extradited him to the US, whose Department of Justice eventually also got its teeth into HSBC. The prosecutors then received a request from George Osborne, as Chancellor of the Exchequer, asking them not to impose too severe a punishment (which might have included being barred from US markets) on this proud flagship of UK banking in a way that might upset markets or disturb the wider financial sector. The Americans having demurred, all that ensued was a “deferred prosecution agreement”, carrying a fine equating to just a few weeks’ profit rather than a criminal trial of the institution or its senior executives, most of whom sailed on with their careers unstained.

In a race for growth in the mid-2000s, ethics lost out

Blackhurst’s cover strapline calls this story “the greatest banking scandal of the century” — a big claim, given the number of banks that have disgraced themselves in one way or another since the turn of the Millennium. The author is making a crucial distinction in his title, Too Big to Jail: other banks such as RBS, which had been ruined by reckless risk-taking before the 2008 crisis, were deemed “too big to fail” because of their systemic importance, which is why they were rescued by taxpayer bailouts. HSBC, by contrast, sailed through 2008 unscathed and — with Stephen Green setting a high moral tone from the top — held itself up as a model both of ethical behaviour and of strong management grip on a global network.

In Blackhurst’s account, revelations from Mexico exploded that reputation — though the story is still not as well-known as it deserves to be. In a race for growth that saw a near-doubling of HSBC staff numbers to 330,000 in the mid-2000s, ethics lost out because in reality bosses in London had little idea what was going on in the more exotic parts of their operational map — and were slow to deal with problems when they did find out.

Too Big To Jail deserves to become a set text for managers of large organisations on the need for ethical vigilance and tight risk procedures at all levels. Beside that worthy purpose, the book is a highly entertaining read, balancing what might in less skilful hands be rather tedious detail of HSBC’s inner workings with terrifyingly bloody scenes of Guzmán and his gang at work: stitching onto a football the severed face of a butchered member of a rival gang, for example.

Blackhurst is eloquent in his regret for the fact that so few senior executives are held fully responsible for bad stuff that happens on their watch, not so much by ill-intent as by boardroom complacency or blinkered pursuit of growth. A mix of both in this case resulted in bespoke wealth management services being made available to some of the world’s nastiest criminals.

Amends are rarely made for such errors of judgement. Blackhurst’s concluding paragraphs on that theme prompted your reviewer to imagine a fictionalised final scene for a cinema version of Too Big To Jail: the Revd Lord Green as a prison visitor, taking the gospel to El Chapo in his supermax cell.