Regulation penalizes UK firms - HSBC

 

Britain has penalized its banking sector by attempting to tighten regulations too quickly after the financial crisis, the head of Europe's biggest bank said in a television interview on Wednesday.

HSBC Plc Chief Executive Michael Geoghegan said he accepts that the industry needs new regulation; but he criticized the world's failure to coordinate measures to try to prevent a repeat of the crisis.

"Maybe the UK is moving too fast over regulation change and places like New York, Paris and the rest of the world are actually staying behind and the UK is penalized" he told Sky News. "There needs to be a commonality of regulation across the world."

The British government unveiled plans last November for a new financial services law that seeks to improve how risk in the sector is monitored.

It aims to increase the financial watchdog's enforcement powers, crack down on excessive bonuses and require banks to write "living wills" for use in case they fail.

Britain's top rate of income tax is set to rise to 50 percent from 40 percent in April. The government has also introduced a one-time 50 percent levy on banking sector bonuses that exceed 25,000 pounds.

"What is disappointing is the UK is leading it (regulation) - and it has been doing some very sensible things - but the rest of the world has not come forward" Geoghegan said.

If regulation and taxation became too big a burden, financial groups would consider moving out of London, he added.

Asked whether damage was already being done, he replied "Yes," and said: "The trouble is that here is an industry that can move. I know a large number of bankers are moving out of the UK."