It must be understood something important

The time of revenge has sounded for Stephen Green. In 2006 and 2007, the President of HSBC, first Bank European and second World Bank, was taken in part by some investors, including fund activist Knight Vinke, who complained of insufficient profitability. Since the explosion of the global financial system, observers have understood how risk-taking hid behind the return on own funds more flattering. And the failure of yesterday has become virtue.

Even though she suffers from his exposure to the "sub-prime" (1) in the United States, the British Bank, which employs approximately 330,000 people in the world, has benefited from its broad international basis, including in Asia, to withstand the storm world, as shown by the third quarter ("Les Echos" from November 12). It is one of the few British banks, with Standard Chartered, not launch of capital increase. The image of the redemption resumption of part of BNP Paribas Fortis or Lehman US by Barclays, everyone expects to see HSBC melt on a décotée target.

But not question to buy an investment bank or a bank in Western Europe: Stephen Green, sixty years, said in an interview to the "Echos" its growth strategy. In France, after the surrender of the regional banks to HSBC France to the Banques Populaires, the owner of the ex - CCF feels satisfied with their device.

Since its lookout of Canary Wharf, London Tower, Stephen Green j. positive action by Governments to prevent that the recession, affecting Western economies one after the other, turns into depression. It is the priority, even if the global imbalances, the origin of the financial crisis, should well be corrected, provides. But, while the banks supported by the capital and other public guarantees, are urgently called to play their role of lenders, Stephen Green was skeptical about their ability to move forward without new recapitalisations.

HSBC was the first, at the end of 2006, to alert on the degradation of a class of assets, then little known, the "subprime" American. Two years after, how do you enjoy the situation

The credit quality continued to deteriorate in the United States. In fact, even the "subprime" theme is exceeded because it is any economy that is going wrong. It must be understood something important. The "sub-prime" was the detonator of the crisis, but this problem has not sprung up from nowhere. He was born between East and West global imbalances, with on one side the ultimate consumer in the United States, and the other plants in Asia and in the Middle East or Russia resources. Since 2001, property and oil exporting countries gathered masses of liquidity that they have invested heavily in US Treasury bills, when, at the same time, the Fed released its monetary policy.

Influx of liquidity, low interest rates...

Yes, and this had the consequence of making the credit too little expensive. At the time, banks have implemented of the levers of debt more important and created financial products more and more complex. And at the same time, investors in need of performance turned to a class of assets apparently safe and well paid, the "subprime".

The roots of the crisis are therefore very structural. But how can we leave

We need a new global economic balance. The world cannot continue with the United States living on a large current account deficit while China builds huge surpluses. The US should spend less and save more. In the opposite direction, China must spend more on its domestic market and save a little less. This will take some time, probably a few years. The financial sector, on the other hand, began in pain to reduce its leverage effect.

We know that the transition periods are painful...

It is a very uncomfortable dilemma for Governments. On the one hand, they must accept the need to correct imbalances both the macroeconomic and the scale of the household budget. On the other, they cannot take the risk that recession, already present in some countries, turns into depression. Because if the movement of rebalancing occurs too quickly, the recession could become much deeper. But avoiding the depression, they may strengthen further imbalances in the future.

On what side of the risk the Governments their, in your opinion

For the moment, they are all their forces to prevent the recession from becoming very serious. Governments, either in the United States, Europe and China, the central banks, now opt for a Keynesian approach. And they are right to do so. It is one of the major differences with the great depression. At the time, the authorities had any forgery. After the stock market crash, the Fed had raised rates, the Government had decided to turn its budget deficit into surplus, and the United States had enacted Smoot-Hawley protectionist laws, then copied in Europe. The consequences were disastrous, the economy contracting by about 25 in a few years, causing political tensions which we have seen the outcome later.

And this time

This time, the political and monetary responses were appropriate. They helped to stabilize the

in September and October, which was a very dangerous situation. I think that we have now spent actually dangerous Cape of the financial crisis. But we have not passed the risk of recession.

Do you fear a rise of protectionism after the election of the new President of the United States

I do not think there will be actual protectionist measures, behind some rhetoric heard in the United States but also in France. These famous laws Smoot-Hawley, taken in 1930, holding the Palm of the worst legislation ever adopted by a country on the last 100 years!

After the received capital public masses, banks are subject to strong pressure for re-injection this money in the economy. Is it that simple

It is reasonable for the authorities wait for banks to play a constructive role, in order to avoid this deep recession. But at the same time, if you you place the lender and the economic crisis increases the risk of credit to borrowers.

Hence the upcoming potential provisions. Or banks have never been recapitalized to height of losses previously...

I agree. It was that compensate the past. I do not think that recapitalisation measures taken so far are sufficient in themselves to ensure more credits. Banks will have need of more capital to lend more. HSBC, for its part, is not needed.

This means more Bank nationalizations

No, I do not think. Banks will be able to meet their needs of recapitalisation, otherwise than by injection of public funds, such as UniCredit in Santander in Spain or Italy. However, in my view, Governments will have to increase infrastructure spending or even, for some, cutting taxes.

It has become a cliché to say that it is the end of a banking world. Do you share this point of view

This is the end of a certain type of banks. The model of the investment bank based on a strong lever of indebtedness and the overly complex trading is dead. But this is not the end of market capitalism. Strictly regulated, it is the best system to create the conditions for sustainable economic growth and a relatively fair development. It has to go out of the poverty of hundreds of millions of people in China and Asia, where more centralized systems had failed. To paraphrase Churchill, it is the worst except for all other systems. But it requires regulation and constant monitoring. There are many lessons to be drawn from the crisis to better organize.

Which are your priorities

Regulators must control the risk-taking of banks by banning overly complex products and excessive indebtedness, and care about the liquidity of the system and not only its solvency. Then, even architecture of regulation must be reviewed, especially in the United States. It has also begun. But I do not think that the Investment Bank belongs to the past.

And the bonus

Some methods of remuneration led to excessive risk taken. This is why the British regulator asked now banks more capital in return for wage structures that would be too risky. It is a good approach. Should also be notified of the banks themselves conduct and investors need to be taken into account in their assessments. For our part, we have revised our system of variable compensation earlier this year in this sense.

In a field of ruins, HSBC is part of some solid financial actors and therefore able to seize opportunities. Are you considering acquisitions

We are a Bank International and emerging markets. We will make acquisitions only if they are part of this strategy. For example, the purchase of a bank in Italy, Germany or in the centre of the United States would not correspond to this strategy. Similarly, we will not purchase not Investment Bank: it do add us nothing and more we will find it difficult to integrate into the HSBC culture.

And an operation in Switzerland

We are very satisfied with our own bank private, based in Switzerland, and concentrated on Asia and the Middle East. We are number three world after UBS and Credit Switzerland and we are approaching slowly.

You have acquired the CFC eight years ago. What balance are you getting this redemption

We are very pleased with this acquisition, so HSBC France is now oriented in the right direction. The sale of regional banks to the Banques Populaires has proved a real case where the value of the assets was superior to the buyer and the seller. In France, we are now a universal bank focused mainly on our customer international connections, exporting firms, or individuals through our HSBC Premier brand. Reason why most of our agencies are located in Ile-de-France, in the Southeast and the major cities. As our Bank of Paris wholesale trades, they work with London as a single activity. The France is about 5 of our profits. Our perspective is there grow by organic growth and we are not new assignment.

The RTC had been paid dear...

It was not cheap because the assets were of high quality, as recently attested the assignment of regional banks of HSBC France. But our record is denominated in dollars and we bought when the euro was very low against the dollar.