HSBC chief warns of bankers' exodus over tax

In interview with Sky TV's Jeff Randall last night Mr Geoghegan, who heads Britain's biggest bank, argued the new tax regime, including the 50 per cent rate, will hurt Britain's competitiveness.

He said: "I think when you start moving taxation for political reasons, the trouble is, it's an industry that can move.

"I know a large number of bankers are moving out of the UK. They can move because they have opportunities in Switzerland and other places to set up their business.

"I do believe we should have a robust financial services industry here in the UK because the City has all the rights to win.

"It would be a terrible shame for it not to benefit from all that expertise that is in our industry."

Mr Geoghegan is himself leaving Canary Wharf on February 1 to go to Hong Kong to oversee HSBC's expansion there, although the bank insists it will keep its headquarters in London.

He said: "East is moving west and HSBC's biggest business is in Asia and it's logical for the chief executive of a very large bank to be at the forefront of where the business is growing fastest.

"The financial centre of London is just one of many centres around the world and I suspect you'll see Shanghai and Hong Kong and Singapore all expanding at a rapid rate as the whole region grows."

Mr Geoghegan also criticised the promise of tougher regulation of the City by the Government in the wake of the financial crisis, saying it will damage business.

He said: "It probably will. We are talking about this payroll tax which impacts probably two or three thousand people inside HSBC.

"It's not the top management. It will impact them but the fact of the matter it is in the dealing rooms, the traders.

"Now if you regulate, as I suspect we will, if you penalise them with taxes I suspect they will move. All will move to what I call shadow banking or twilight banking.

"They will move to small offices where they will not be regulated, and I think that is a risk and it may well lay the foundations for a future problem in financial services.

"I think the UK is moving too fast over regulation change and places like New York, Paris and the rest of the world are staying behind while the UK is penalised.

"London needs to continue to do what it does and that is lead by example but it needs to bring along the major other financial centres with them.

In other words, London and New York, Frankfurt, Paris, Hong Kong, Tokyo, Singapore and Dubai, all pulling together to make a powerful change for good and I have no objection.

"I am very proud of the FSA and others who are leading that change but not adopting the change in isolation of others. I think that is a step too far at the current time and that would be detrimental to the UK."