The Bank of England will not back down on tough regulation, top official and ex-Barclays boss Martin Taylor said in a speech published yesterday, dismissing threats from banks like HSBC that they could leave the UK for more welcoming shores.
Some in the industry have started to argue that banks are now safe, and there is no need to implement the ring-fence splitting retail banking away from investment banking.
Banks like HSBC and Standard Chartered have said they are reviewing whether or not to keep their headquarters in Britain, such is the weight of tax and regulation, as well as the relatively hostile state of political and public debate.
“Speaking as a former banker, I don’t believe regulation alone is likely to prompt bank re-domiciling – apart from anything else, the rules are not that easy to escape,” said financial policy committee member Martin Taylor.
And he noted that when banks had previously talked about leaving the UK, others in Switzerland were threatening their regulators with plans to move to London.
“The increasingly shrill emergence of voices calling for a regulatory softening is both structurally wrong and conjuncturally wrong. It remains the ungrateful job of the supervisors to save the banks from themselves,” he said.
However, banking industry insiders said it is not only regulation which is making the UK a less attractive place to work.
“The bigger concern for the UK banking industry is the variety of bank specific taxes that have been introduced in recent years, and in particular the Bank Levy, which we feel are damaging the competitiveness of the UK as a place to do business,” said Paul Chisnall from the British Bankers’ Association.