HSBC - Too big for London
Discussion
HSBC may move from London if the UK government decides to break up big banks, a senior executive has said.
Stuart Gulliver, head of the firm's investment banking division, made the warning at a banking conference, according to newspaper reports.
He said he was "genuinely concerned" that the UK's banking commission would recommend splitting up banks.
"[That] has significant implications clearly for where we may choose to headquarter our institution."
"I want to be crystal clear. Our preference is to be headquartered in the UK," added Mr Gulliver.
He also noted that no other country was looking at breaking up banks in response to the 2008 financial crisis.
http://www.bbc.co.uk/news/business-11174953
Should we simply say that all banks can stay in London but those over a certain size will never be bailed out by the taxpayer?
Stuart Gulliver, head of the firm's investment banking division, made the warning at a banking conference, according to newspaper reports.
He said he was "genuinely concerned" that the UK's banking commission would recommend splitting up banks.
"[That] has significant implications clearly for where we may choose to headquarter our institution."
"I want to be crystal clear. Our preference is to be headquartered in the UK," added Mr Gulliver.
He also noted that no other country was looking at breaking up banks in response to the 2008 financial crisis.
http://www.bbc.co.uk/news/business-11174953
Should we simply say that all banks can stay in London but those over a certain size will never be bailed out by the taxpayer?
It's a natural response in my opinion. HSBC is the best run bank by far in the UK (when it comes to managing risk) and was in no danger at any point during the financial crisis....indeed they were the first people to take provisions against their sub prime losses...because they could afford to. None of the others could so they didn't........
One of the main reasons HSBC could was that is has a well diversified income stream. Breaking banks up doesn't make the system any safer....good management and proper regulation does that.
One of the main reasons HSBC could was that is has a well diversified income stream. Breaking banks up doesn't make the system any safer....good management and proper regulation does that.
Does proper regulation of banks really exist? History seems to show that an unforeseen crisis occurs and then everyone blames the regulator. If we attempt to regulate the banks heavily so there is little chance of a failure they will complain of over tight regulation and threaten to move elsewhere.
The argument that HSBC was never in danger seems spurious, the argument during the credit crunch is that we couldn't let any bank fail as it would start a house of cards collapse bringing down the rest. If some banks would have been fine, why were the weak bailed out?
The argument that HSBC was never in danger seems spurious, the argument during the credit crunch is that we couldn't let any bank fail as it would start a house of cards collapse bringing down the rest. If some banks would have been fine, why were the weak bailed out?
HSBC is a global bank which chooses to base itself in London, rather than a UK bank with some global operations.
It is the presence of such institutions that keep London as a global financial centre. The government should be very careful of destroying our last economic sector where we are a world leader for the sake of cheap populism to appease the economic illiterates of the media and general populace.
The bonus tax in itself was enough to cause long term damage to London as a place to do business. Further measures should be well considered and for the benefit of the country.
It is the presence of such institutions that keep London as a global financial centre. The government should be very careful of destroying our last economic sector where we are a world leader for the sake of cheap populism to appease the economic illiterates of the media and general populace.
The bonus tax in itself was enough to cause long term damage to London as a place to do business. Further measures should be well considered and for the benefit of the country.
Fittster said:
...
The argument that HSBC was never in danger seems spurious, the argument during the credit crunch is that we couldn't let any bank fail as it would start a house of cards collapse bringing down the rest. If some banks would have been fine, why were the weak bailed out?
The clue is in the name for this particular one.The argument that HSBC was never in danger seems spurious, the argument during the credit crunch is that we couldn't let any bank fail as it would start a house of cards collapse bringing down the rest. If some banks would have been fine, why were the weak bailed out?
Hongkong
Shanghai
Banking
Corporation
They do business in surplus countries too
randlemarcus said:
Fittster said:
If some banks would have been fine, why were the weak bailed out?
Because not all voters bank with the strong ones.gamefreaks said:
I'm not convinced I understand the logic of breaking up 'big banks' so that Santander can become an ever bigger bank!
The logic is if banks are smaller their failure is less likely threaten the whole system so no need for the taxpayer to step in to keep things going. The problem is that HSBC, although operating globally would be the UKs issue if it needed a bail out. hyperblue said:
Fittster said:
Soovy said:
Simple. Treat intelligent people who pay millions in income tax like sh t and they'll go somewhere else.
By s
t do you mean not bailing them out when they fk up?Should the commercial banking sector always be underpinned by the taxpayer? To big to fail, to big to exist in the first place?
unrepentant said:
If the government are stupid enough to scare them away from London they are really dumb.
Agree, and this is why I don't think it'll happen. At the election, it was the LibDems wanted to split the banks, but the Tories wanted better regulation. I think the Tories will get their way.The Banks that were bailed out where bailed out to ensure that when you went to pay a bill there was the money to do it, the banks were bailed out but that bail out was of the economy as a whole, without the banks having money then people don't have money. So Fittster if you are so anti bank bail out I am willing to take all your money the government underwrote.
Dont buy any of this, if FSCS hadnt paid out on the Icelandic banks, and govt not intervened with Northern Rock/Bradford-Bingley there would have most likely been a run on ALL banks, HSBC included, not to mention the domino affect of other now recapitalized banks defaulting on liabilities to HSBC. Presumably HSBC have also benefited from the Special liquidity Scheme which seems to have kept interbank rates artificially low forcing the taxpayer to underwrite borrowings and lending out at rates several percent above.
Engineer1 said:
The Banks that were bailed out where bailed out to ensure that when you went to pay a bill there was the money to do it, the banks were bailed out but that bail out was of the economy as a whole, without the banks having money then people don't have money. So Fittster if you are so anti bank bail out I am willing to take all your money the government underwrote.
I'm not anti-bank as such. I'm anti the state supporting any commerical industry, be that mining, ship building, financial services. To ensure the economy continues to tick along if a bank goes pop the simple solution would be to separate investment and retail banking activities. A division that has a long track record of stability in the states.
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