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HSBC may leave the UK if forced to split
by Deborah Hyde on Sep 03, 2010 at 09:39
And yesterday Gulliver pointed out the bank's preference 'is to be headquartered in the UK.'
Bruce Packard, banking analyst at Seymour Pierce, has warned that the vociferous opposition from the banks to proposals to split them up means they may be missing a trick, saying that break-ups could create value and pointing out that the deposits guarantee by the UK government is too good to shun.
‘We believe that management who ‘grasp the nettle’ and do what the regulators and politicians want are more likely to create shareholder value,’ he said.
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2 comments so far. Why not have your say?
Julian Stevens
Sep 03, 2010 at 12:41
And, unless the profligacy, self interest and virtually total lack of accountability of the FSA (to name just three issues) are addressed when it is superseded by the CPMA, life companies will do the same. Who can blame them? The black cloud of oppressive and biased regulation, dressed up as striving for "better consumer outcomes", has become so dreadful that it's costing the industry more and more to earn less and less.
report thisKevin Neil
Sep 03, 2010 at 12:56
The comment from John Varley @ Barclays misses the point (which is entirely to be expected from one with such a vested interest!). This is not that big banks are more or less likely to fail, but that the consequences (and subsequent bail-out costs) of a big bank failing due to undue risks taken by its investment banking side are so much greater than the consequences and costs of a narrow retail bank failure.
If the UK taxpayer had only had to bail-out the like of Dunfermline BS, B&B, and Northern Rock, instead of taking on RBS and Lloyds then we would be in a far better position.
If the likes of Barclays and HSBC want to continue as integrated banks then they would be better advised to come up with some cast-iron way of ensuring that the casion operations can be spun off and allowed to fail instead of dragging down the Retail side with it and triggering large bills for the taxpayer.
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