City loses appeal as tax and new rules bite

A LEADING publicly-quoted UK bank has admitted that there has been a fall-off in staff willing to relocate to London due to the twin tax and regulatory crackdowns.

Standard Chartered, which last week tapped the stock market for 3.3 billion to ensure compliance with the new Basel 111 rules on capital, claimed that the "balance of attractiveness" had moved away from the City of London.

Peter Sands, chief executive of Standard Chartered, most of whose operations are in Asia and emerging markets even though it is listed in London, said: "Yes, there has been a fall-off in banking staff coming to the UK."

Sands said Standard had no plans to move its tax domicile from the UK, primarily because it would be a big distraction.

He added that even if the bank moved its domicile from the UK, London's status as the international banking centre of the world would ensure a significant UK business operation would still be maintained. But the UK banking sector faces a challenge in the global market for banking talent "and we are seeing intense competition for talent in our markets, particularly in places like Asia. The international mobility of talent is more of a pertinent issue than the domicile issue", said Sands.

Standard employs just 2,000 of its 85,000 staff in the UK, and is widely seen as being one of the UK banks least affected by the sub-prime lending fiasco.