PRESS ASSOCIATION -- Former City minister Lord Myners has suggested that HSBC should move its UK retail arm to Paris to avoid the proposed banking reforms, it was reported.
The Government is considering measures suggested by the Independent Commission on Banking (ICB) to force banks to ring-fence their retail banks from their investment banks to help avoid more bail-outs.
The proposals are unpopular among banks, who say the measures would restrict the amount they can lend and may make the UK uncompetitive compared to other financial centres.
Lord Myners, former chairman of fund manager Gartmore and retailer Marks & Spencer, said HSBC could move to France to escape the reforms, according to the Sunday Telegraph.
HSBC is the British bank thought likely to be the most affected should the recommendations published last month by chairman Sir John Vickers become law.
His words will add to fears that the reforms will encourage banks to relocate overseas, causing the UK to lose jobs and tax revenues.
Lord Myners told a discussion organised by the Association of Corporate Treasurers: "I've said HSBC would want to consider, or I suspect will consider, moving its holding company.
"If I was the director of HSBC, I would simply cease to do business in the UK through HSBC plc, which is the old Midland bank, and I would instead do it through CCF, their French bank, which can be passported into the UK, and thereby avoid all the extra capital requirements that Vickers is putting on me, and also avoid the UK bank levy."
He went on to say it was "blindingly easy" to spot the loopholes in the Vickers report, and because the UK would be alone in implementing such stringent measures, the opportunity for regulatory arbitrage is high, the newspaper reported.
HSBC has previously said it has no intention of moving its headquarters away from London, but every three years it carries out a review of where it should be based. The bank's chairman Douglas Flint is thought likely to meet Treasury officials before the end of the year to discuss the ramifications of the ICB report.
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