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HSBC bosses and HMRC face British politicians over the 'unacceptable' Swiss bank account scandal

HSBC had a tough week. It told investors that the bank was hit by a 17% plunge in profits before tax in 2014 and tried play down its chief executive being dragged into the Swiss bank account scandal.

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Today, HSBC Chairman Douglas Flint and CEO Stuart Gulliver will have to answer questions from a panel of politicians over the Swiss bank account debacle.

The Group Chief Executive of HSBC Stuart Gulliver (R) arrives with Chairman Douglas Flint
HSBC CEO Stuart Gulliver (R) with Chairman Douglas Flint in 2013. Reuters

The Guardian newspaper initially reported that Gulliver "sheltered £5 million of his own money at a Panamanian company with Swiss HSBC account."

Gulliver then hit back at allegations over tax avoidance or evasion, on a reporters conference call, with: "I pay full UK tax on my entire worldwide earnings."

The reason Gulliver placed £5 million into the Swiss bank account via a Panamanian company holding is because he wanted to hide how much he earned from his colleagues. At HSBC, in the 1990s, traders were able to look up their colleagues bank account details via in the in-house computer system

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However, he also admitted that HSBC's Swiss unit was "a source of shame and reputational damage" in the past. The bank then called some of the bank's historical practices as "unacceptable."

At 2:15 p.m. GMT (10:15 E.T) today, Flint and Gulliver will join a range of officials from the UK tax authority, HMRC, to give evidence to the Treasury Select Committee over the tax evasion and money laundering scandal, which followed after whistleblower Herve Falciani leaked thousands of Swiss bank accounts to a range of European authorities.

"The Committee is concerned about allegations involving HSBC and its Swiss private bank," Andrew Tyrie, chairman of the Treasury Select Committee in a press statement.

"Banks have repeatedly told the Committee that, since the crisis, they have put in place reforms to ensure that they operate on the basis of sharply improved standards. The Committee will need reassurance that they have done so in private banking."

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Falciani handed over 100,000 HSBC client accounts to French authorities in 2008. In total, the accounts are worth £78 billion in assets. Since then, France, Spain and the UK have recovered over £500 million in tax from the data.

HMRC's CEO Lin Homer, and two other high ranking tax officials will also have to answers questions over handling of the bank account data leak. 

In 2010, the UK's HMRC received details regarding the bank account of about 1,000 Britons who were accused of evading taxes by using the HSBC Swiss subsidiary.

However, HMRC did not tell the Financial Conduct Authority of the documents, citing an "international treaty agreement" with France for prohibiting it from passing on details to anyone outside the tax authority.

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