HSBC's decision to keep its HQ in the UK gives a welcome boost to London's position as a major financial centre. As Grace Pascoe reports, it follows an uncertain 10-month review period - and is not without risks of its own.
It's one of London's landmark buildings - with a company sign that would be sorely missed by the financial district were it gone. HSBC is though, to stay - rejecting an option to move its HQ to Hong Kong. The decision comes after a 10-month review. And is a welcome boost to London as a financial centre. That status seen by some as threatened by regulation and rising costs. Panmure Gordon chief economist, Simon French. (SOUNDBITE) (English) PANMURE GORDON, CHIEF ECONOMIST, SIMON FRENCH, SAYING: "This decision from the HSBC board has been off the back of heavy lobbying of the UK government and a series of appeasement measures from the UK Treasury designed to reduce the tax burden over time and a recalibration of the bank levy, a dropping of the banking inquiry." HSBC shares are down more than 30 percent from last April. They were up after the announcement. If HSBC had left London contractor Paul thinks others may have followed. (SOUNDBITE) (English) LONDON CONTRACTOR, PAUL, SAYING: "That would have been possibly the thin end of the wedge for other companies deciding to move out as well." There are still risks for the bank in staying. Top of the list, says French: if an upcoming UK referendum on whether to leave the European Union results in an 'out' vote. (SOUNDBITE) (English) PANMURE GORDON, CHIEF ECONOMIST, SIMON FRENCH, SAYING: "If it were to come to pass, what risks do they start to hold by being domiciled in London but potentially having to operate dual systems, one for the British market and one for the European market? It's not like the risks have gone away for HSBC," On that theme, chief exec Stuart Gulliver has reportedly warned that a UK exit from the EU could still result in some bits of the business moving - and a thousand of its staff relocating to Paris.