I have monitored HSBC for nine years now: in this time-span the bank has moved into the improbable position of being the undisputed leader of the British banking scene, besides being Europe's top bank by capitalisation and definitely the most meritorious bank in the world in matters regarding the transparency of its subprime losses.
The world impact of HSBC is not too difficult to delineate. In the UK, it has become the most strongly capitalised bank.
This has happened while the Lex column of the Financial Times has been pouring scorn on Barclays for chairman Marcus Agius' statements about his bank's capital adequacy.
Agius, scion of a Malta trading company and for practical purposes, because of extraordinary personal merits and marriage a co-opted personality in the Rothschild banking dynasty, has erred grievously with regard to revelations about Barclays' financial integrity.
Last Friday morning, CNBC spoke of trouble at the top of Barclays.
After his recent public statements, the Lex column of the Financial Times has told him plainly that the share price of his bank does not reflect the public's confidence in his leadership.
In the last 52 months it has declined by about 60 per cent. This is just contrary to what is happening with HSBC, the share price of which has been bounding forward for three.
HSBC's share price has gone up by 19 per cent. HSBC did suffer troubles in recent months, but it has changed its strategic banking course and come to realise that its destiny lies with the world's emerging economies.
If one were to examine the statistics and philosophy of HSBC and Barclays, one would cease to be surprised why the former bank has advanced by 19 per cent during these last months, coming to a share price position of only 10 per cent away from its high point of 52 weeks ago.
The other great bank, still great in spite of serious trouble at the top, seems to be fighting an unsuccessful battle to win back its past share price magnitudes of a year ago.
Since that time, a tornado has ripped through the world banking system. This it does under the name of the subprime crisis, engendered by the desire of the US government to extend a helping hand to its lower classes.
It was a well-intentioned policy measure but seriously overdone and it destabilised the world banking system.
Basel rules allowed banks not to reveal their off-balance sheet risks, creating a preposterous situation where no bank in the world could trust its fellow institution.
This contracted world liquidity.
This is a sorry moment for world banking and we only see HSBC providing effective leadership. Leadership in Barclays is under a black cloud.
HSBC tier 1 capital ratio is 8.2 per cent against a European average of 6.5 per cent, Barclays by contrast has one of 5.1 per cent.
Great bankers should imitate HSBC's action when, early last year, it came clean on its subprime losses.
They must display and practise a code of ethics and not state that a bank 'does not have religion' on how capital should be organised, as Agius has done in the last Barclays meeting.
If banks do not trust each other, neither will the public trust them. The coming Financial Authority (FSA) regulations are good news for investors.
Banks need investor goodwill, which is, after all, what makes a money machine work.
Mr Azzopardi Vella, economic consultant with DBR Investments Ltd, has promoted the Malta Development Fund and advised S & P. johnazzopardivella@hotmail.com