HSBC warns Government over banking break-up

Sep 4 2010 by Iain Laing, The Journal

EUROPE’S biggest bank HSBC has warned that Britain’s big banks could move overseas if a Government review decides that lenders should be broken up.

Stuart Gulliver, head of investment banking, said Canary Wharf-based HSBC was “genuinely concerned” that a UK Government-appointed commission would recommend big banks must split retail banking from riskier investment banking.

He said that it was “clearly possible” the commission will recommend a break-up and that this would affect institutions including HSBC, Barclays and Standard Chartered. HSBC moved its headquarters from Hong Kong to London in 1991 after its acquisition of Midland Bank.

“That has significant implications for where we may choose to headquarter our institution and that would probably also be the case for the other two institutions,” he added. “Our absolute wish is to stay here in the UK, but we won’t know until we see how the commission responds.”

He also said in his answer to a question at the financial industry conference hosted by Nomura that no other country was looking at breaking up banks in response to the 2008 financial crisis.