HSBC should leave Britain - it would be better for both parties

Recently, HSBC has dropped hints that it might move its headquarters out of London. The consensus is that that would be a terrible blow to the UK. But, says Matthew Lynn, it would be better for everyone if HSBC moved away.

If HSBC ever decided to adopt a corporate theme song, it should probably be The Clash's Should I Stay Or Should I Go. Over the past few months, Europe's biggest bank has dropped constant hints that it might move its headquarters out of London. Every time it does, serious-looking columns get written about what a terrible blow it would be to the City if HSBC were to abandon this country. Yet the interesting question is rarely asked: does it matter if HSBC moves somewhere else?

HSBC has made few comments in public about the possibility of moving to another country. But over last weekend, the stories in the press saying plans for a move were at an advanced stage looked to be well-sourced. Addressing a parliamentary committee last month, HSBC's chief executive Douglas Flint said investors are "asking us to explain the cost of being in the UK and the benefits". That certainly sounded like a clear signal that the issue was very open to debate. In the wake of those stories, HSBC issued a clear denial that any move was imminent. Yet there is rarely smoke without fire. It would be very odd if HSBC hadn't thought about moving elsewhere. Its constant threats make a very good bargaining tool. Stop being horrid to the banks, it is implying, or else we'll shove off. Yet for all the controversy, it would actually be better for both parties if HSBC moved elsewhere. Here's why.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.