Why given the demand for funds from banks looking to borrow in the interbank lending market?
As the review noted, HSBC was right not to lend it to its weaker rivals at the risk of not getting it back.
Readers know that banks are in the business of making credit judgements. There is always some chance that a loan will not be repaid.
The reason that the interbank loan market froze and banks like HSBC are not lending is that they do not have access to the information that is needed to assess the risk of not being repaid.
Specifically, banks do not have access to ultra transparency from the borrowing bank so that they can evaluate the borrowing bank's asset, liability and off-balance sheet exposure detail to assess the probability of repayment.
One of the most eye-catching of HSBC’s 2011 figures was how much money it has on deposit at central banks. The figure’s shot up from $57.4bn (£36.3bn) to almost $130bn – a sure sign of risk aversion, if ever.
Before the crisis in 2007, that number was $22bn.
But chief executive Stuart Gulliver is rightly loth to lend depositors’ cash to weaker rivals at the risk of not getting it back, while noting wryly that: “The only people you want to lend it don’t need to borrow it.”
Such prudence hits net interest income but explains why HSBC has coped with a crisis that has decked profligate competitors, not least Royal Bank of Scotland and Lloyds Banking Group.