There has been an international outcry over the leaked HSBC files, which provide evidence that the bank’s Swiss arm helped wealthy clients put millions of dollars worth of assets out of the reach of the tax authorities. Naturally, politicians from all parties have responded by committing to holding anyone found guilty of tax evasion accountable for their actions.

There has also been disbelief and growing scrutiny of government watchdogs, such as Britain’s tax authority HM Revenue & Customs (HMRC) for failing to properly investigate the matter. According to Danny Alexander, the Liberal Democrat chief secretary to the Treasury:

We quite rightly prosecute and often jail people guilty of damaging our society through conventional crime and antisocial behaviour. The way we treat systematic tax evasion should be no different. If that means jail for offenders and those that conspire with them, then so be it.

Such calls to punish elites are indeed laudable and urgent. Yet this issue runs deeper than a few bad apples. Instead it touches on the fundamental problems of corporate power and political plutocracy plaguing our economy and politics. While punishing privileged wrongdoers may be just and feel good, this should not distract from the larger need to change the very system giving birth to these actions.

The revelation in leaked bank files that HSBC’s Swiss banking arm has helped wealthy customers put millions of dollars worth of assets out of the reach of the tax authorities confirms the way in which the use of tax havens has become commonplace.

In the globalised modern world, the vast majority of wealthy individuals and medium-sized and large corporations habitually seek ways to avoid taxes.

As Richard Murphy, Christian Chavagneux and I researched for our book, Tax havens: how globalization really works, we discovered that tax havens are an integral node of globalised capitalism. They are just part of the way business is conducted these days. And the leaked HSBC files are a prime example of this in action.

According to the leaked files, HSBC maintained 30,000 accounts holding almost $120 billion of assets in its Geneva branch between 2005 and 2007. The files appear to show that the largest proportion of account holders were Swiss, holding altogether about $31 billion. They also show 8,883 UK citizens holding $21.7 billion, 1,138 Venezuelans holding $14.7 billion, Americans holding $13.7 billion, French with $12.5 billion, Israelis with $10 billion and even the Palestinian authority had 55 holders with $150m.

Lessons to be learned

There are a number of lessons to be learned from these leaks. First, foreign nationals of many countries are allowed to maintain accounts in foreign banks, but typically they are required to declare those accounts on their tax return. Only their national inland revenues would be able to confirm if they had done so.

Considering that HSBC Geneva did not provide a particularly competitive savings rate, and the report prepared by the International Consortium of Investigative Journalists which reveals the secret Swiss accounts, presents a picture of secrecy and deception, it is not unreasonable to suspect that a good portion, if not the vast majority of these accounts, have had something to do with reducing their clients' tax obligations.

Iceland has sent four former directors of its bank Kaupthing to prison for fraud. But the chances of similar legal action happening in the UK are low, where fraud investigators have a poor record.

The Serious Fraud Office (SFO) is the main agency for investigating and prosecuting major fraud. It was formed in 1988 after a spate of high-profile cases. A government-sponsored inquiry into share price rigging at Guinness in the 1980s concluded that too many executives at major corporations had a 'cynical disregard of laws and regulations … cavalier misuse of company monies … contempt for truth and common honesty. All these in a part of the City which was thought respectable'.

But rather than changing corporate laws, amending personal liability of directors, or creating an effective enforcement agency, the government created the SFO.

Last week, the SFO's case against businessman Victor Dahdaleh collapsed because at the last minute it could not provide evidence of alleged graft. This is not the only case the SFO has botched. It spent between £25-40m investigating price-fixing by pharmaceutical companies supplying the UK’s National Health Service (NHS), but the case collapsed because of errors in the interpretation of law.

Previously, the SFO was very slow in taking action against BAE Systems over allegations of corrupt practice. The SFO mislaid 32,000 documents relating to the case. It is currently facing a lawsuit for damages from the Tchenguiz brothers after dropping a three-year investigation into the collapse of Icelandic bank Kaupthing.

Lord Sassoon, until January this year economic secretary to the Treasury in the UK government, is a man who bestrides the worlds of government and finance.

In 2012 he delivered the inaugural summer lecture of the British Bankers Association. He began by thanking the outgoing head of the BBA, Angela Knight, for her services to Britain [BBA summer lecture, 20 June 2012]:

'Angela, the country owes you a debt of gratitude', he said, praising her for her steady, calm presence during the Northern Rock crisis of 2007, for her masterful lobbying to defend the City in Brussels, and for rebuilding banking’s relationship with the UK government and with the industry’s customers.

Sassoon went on to explain how, as early as 2003, the Bank of England financial stability team had already identified “some of the key issues that would be at the heart of the crisis, for example, the over reliance of Northern Rock on wholesale funding, the extent of Bradford and Bingley’s exposure to the buy-to-let market, RBS’s increasing exposures in Germany and elsewhere”.

Offshore dynasts, old and new

He talked of how in 2005, Andrew Large, who was deputy governor of financial stability at the Bank, was 'ringing alarm bells', one of two people identified by Sassoon at 'the top global table that were standing out against the orthodoxy'. 'Sadly we all listened but took no action,' said Sassoon.