ICB ‘sceptical’ over threats to quit the UK

Barclays had been seen as most at risk of quitting the UK if the Independent Commission on Banking proposed the more formal separation of businesses, due to its reliance on investment banking.

Along with HSBC it had threatened to quit London for New York or Hong Kong if regulation was too onerous.

“One needs to cast a very sceptical eye on remarks of that kind,” said ICB chairman Sir John Vickers.

“There will be a whole host of practical obstacles, legal obstacles and reputational obstacles.

“How are people going to think? Anyone contemplating a move of that kind would need to pay very careful attention to anything along those lines.”

The report said relocating could jeopardise a bank’s stability – possibly resulting in customers withdrawing deposits in large numbers.

It added the UK’s continued prosperity was not dependent on British banks staying put.

“Most of the historical evidence suggests that the City’s growth was not driven by UK-headquartered banks’ success but by its openness to foreign firms,” it said.

“The corporation taxes lost from UK headquarter relocations may be relatively small, and increasingly so in future.”

The British Bankers’ Association said: “Any options for reform must take into consideration the need to keep the UK at the forefront of the international banking community.”