The government’s Banking Commission, chaired by former Bank of England economist John Vickers, has publicly announced that a decision may be forthcoming requiring that banks split up their investment and retail sectors. This requirement would be for all UK banks and not just those that received government bailout money. HSBC has issued a strong statement that if required to split the bank, they would relocate out of London.
The Banking Commission’s reasoning it to prevent a bank from getting so big that should they become financially unstable it would not threaten the economic health of the country. HSBC however believes that the commission should leave their bank alone and others, especially those like HSBC that did not need government bailout funds. While insisting HSBC would prefer to remain in London, relocating is definitely an option they would consider.
The strong statement concerning the Banking Commission was issued by Stuart Gulliver, HSBC’s head of their investment banking unit. Gulliver is considered the predecessor to Michael Geoghegan, HSBC’s chief executive. Gulliver mentioned that relocation options could involve Hong Kong or the US, and Geoghegan is already located in Hong Kong as HSBC has been seeking to expand into emerging markets.
Gulliver said: “I want to be crystal clear; our preference is to be headquartered in the UK. We would hope that there isn´t a conclusion that causes the banks that didn´t actually take any money from any governments anywhere in the world to have to move their headquarters.”
Last month, HSBC rival, Standard Chartered, warned that its consideration of keeping its headquarters in London was being questioned as well due to disadvantages that would be imposed on banks concerning regulations.