Boris Johnson will warn the Chancellor he risks damaging London’s economy if he does not cede to banks’ demands to water down regulatory reforms.
In a pre-Budget letter to George Osborne, the Mayor will warn that Britain’s biggest banks — including HSBC — could leave London if concessions are not made.
HSBC says it will take a hit of £1.3 billion a year if the amount of capital it is forced to hold to guard against collapse is calculated as a proportion of its worldwide assets, rather than those in the UK.
Mr Johnson will say concessions to the Independent Commission on Banking’s proposals must be made for HSBC “by exempting non-UK operations that pose no threat to the UK taxpayer”.
Mr Osborne has raised the possibility of such an exemption.
A spokesman for the Mayor said: “There is a threat from a number of directions to some of the most important industries in the capital.”
