British banks 'funding cluster munitions'
Friday, 24 October 2008 12:12 PM
Britain's banks are using customers' money to finance the arms trade, including the sale of cluster bombs, a report revealed today.
The report, commissioned by the anti-poverty charity War on Want, calls on the government to stop high street banks such as Barclays, HSBC, Royal Bank of Scotland (RBS), Halifax Bank of Scotland (HBOS), and Lloyds TSB from using billions of pounds in customers' savings to back the weapons industry.
"People have seen the mess that the banks have made with customers' money. But few know they are using our cash to fund arms companies," said Ruth Tanner, director of campaigns and policy at War on Want.
"The British government must introduce regulation to stop banks making a killing from the arms trade."
According to the report, Barclays has the largest amount of money invested in the global arms trade, totalling £7.3 billion. HSBC comes in a distant second £450.6 million.
An HBSC spokesman told politics.co.uk the report was "inaccurate and misleading".
"HSBC has a policy of not financing weaponry," he said.
"This is a publicly stated policy and something we take very seriously indeed."
"[The report] claims we hold shareholdings with a number of arms companies when in fact shares which are shown as belonging to HSBC are actually 'nominee accounts' and are held by us on behalf of other organisations and customers for administrative purposes only," he continued.
The report said Royal Bank of Scotland holds shares in the UK arms sector totalling £36.4 million.
A spokesperson told politics.co.uk: "RBS lending practices act in accordance with the strict regulation and licensing arrangements for the manufacture and trade of defence equipment, both within the UK and in line with internationally accepted standards.
"Issues such as defence policy are, rightfully, matters of government responsibility."
The report documents how banks help fund the arms industry by direct investment in shares, participation in loan syndicates, and the provision of banking services.
All of the high street banks are the primary banker for at least two of the leading British arms companies. RBOS and Barclays are principal bankers for four of the top ten.
Barclays and Lloyds TSB are the only high street banks which hold shares in the arms companies above the three per cent reporting threshold, but all the major banks hold at least some shares--four of the five holding shares in all major UK arms companies.
All of the high street banks, except HBOS, have given loans to at least one cluster bomb manufacturer in the past ten years; allegedly Barclays and HSBC invest in these companies.
Banned by international treaty, cluster bombs are considered to be highly dangerous to civilians since they often fail to explode on impact and become de-facto landmines.
Every hour, two people are killed or injured by cluster bombs. One out of every three cluster bomb deaths is a child mortality.
Barclays, HBOS and Lloyds TSB were contacted for this article but did not respond.
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