You say there are difficulties in the US. What can you tell us about the impairment charges?

The thing that’s emerged in the third quarter is that the housing market deterioration is beginning to have a broader impact.

What that’s meant is that for the first half of the year we were seeing the provisioning requirements in the business $200m (£96.6m) to $300m ahead of the charge-offs, so the position was deteriorating but relatively moderately.

In the third quarter, we added provisions about $1.5bn ahead of what we charged off, which reflects the illiquidity that’s being seen within the marketplace, and a slightly broader housing market impact than we’ve seen hitherto.

Where are you with SIV and conduit exposures?

Okay, I think we need to take them into two pieces. On our conduits, these are 100% liquidity supported by HSBC. They are a combination of multi-seller conduits where we work with our clients.

And then there is one that is an arbitrage conduit for our own purposes. These have always been on our balance sheet. These are funding in the commercial paper markets perfectly normally at the moment, and we don’t see any particular strain. The assets within the conduits are all performing well, they are all high-graded.

It’s a similar story with the SIVs. There’s slightly more difficulty in terms of investor appetite for structured paper at the moment, and they don’t benefit from 100% liquidity support from HSBC.

But we’re working with the income note-holders, ie. those that are providing essentially the capital to the vehicles and to the other note-holders to determine what the best way of dealing with everybody’s best interests is in what is a distressed time in the marketplace.

At the half-year, the view in the market was that you retained too much capital, and pressure was exerted to consider returning some to shareholders. I guess you feel slightly vindicated by that.

I think we’ve always been very consistent in our view as to what the benefits of having a strong capital base were.

And events over the last several months have shown how things can happen that are unexpected, and why having a strong capital position is a strength for a financial institution.

We’ve been consistent in what we’ve said for a very long time and we’ll continue to be consistent.

Your strategy has been under question. Does this trading statement help or hinder your case?

It’s a great paradox. You’ve got a US economy that’s still growing, it’s adding jobs. And yet it has a housing market that is very, very weak indeed. The focus over the near term is going to be very much on asset prices. And it’s difficult to see that in the US the housing market hasn’t got another 12 or 18 months to run, at least, with falling or levelling off prices.

Your performance in emerging markets has underpinned the growth but what’s driven that?

I think a number of factors. Trade within and between emerging markets has been very strong. Trade with the developed world has also been very strong. That’s driven local economies. As economies have expanded, that’s led to credit appetite as people have had more disposable income.

For the full interview and more FD, CFO and CEO online programming go to www.cantos.com