Major Banks Threaten to Leave the UK Over Financial Sector Shake Up

HSBC are one of the banks who have threatened to leave the UK

A Government inquiry is to examine whether retail and investment banking should be separated. The suggestion of which has prompted large financial institutions, such as HSBC,  to threaten to leave the UK.

The proposed reforms are just one of many major changes the Independent Commission on Banking are considering in a bid to reduce ‘market concentration’. What this means for the public is that High Street monopolies such as Lloyds will be most vulnerable.

Many of those within the financial sector feel that this move is a government reaction to the  public outcry over bank’s conduct leading up to the financial crisis, a key concern expressed by the electorate during the general election.

Stephen Hester, CEO the Royal Bank of Scotland, told the BBC that he believes that the concerns over banking monopolies was a ‘red herring’.

“In the financial crisis that we had, if you were a narrow bank, you were much more likely to go bust and if you were a small bank, you were much more likely to go bust – so these issues were not at the heart of the crisis,” he said.

Andrew Tyrie, the Conservative chairman of the Commons Treasury Committee, is determined that the review will be clear and precise. Speaking on BBC Radio 4’s Today programme Mr. Tyrie said that the ICB ‘have got to be tough and resilient’.

“They’ve got to make sure that they don’t just become a prey to this very powerful interest group that we have in the country, which is the banks, and end up just reporting that we can muddle through.”