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Naomi Rovnick

HSBC Holdings chairman Stephen Green has defended the size of the group's global banking operation and further expansion plans against growing calls in Britain for 'too big to fail'  financial institutions to be broken up.
The London-headquartered group and Hong Kong's largest lender, capitalised at HK$786 billion, would not return its headquarters to Hong Kong  but would continue growing in Asia, Mr Green said.
Suggestions by the Bank of England and some British politicians that very large banks should carve up their deposit-taking and riskier investment banking operations were 'impractical', he said.
The British government has spent more than GBP1 trillion (HK$12.76 trillion) to rescue troubled banks including HSBC's competitors, Royal Bank of Scotland Group and Lloyds HBOS, and central bank governor Mervyn King said  recently: 'If some banks are thought to be too big to fail, then ... they are too big.'
But Mr Green dismissed the possibility of Britain demolishing large banks.
'We can achieve long-term, sustainable expansion. Banks' businesses cannot be split off. We live in a very interconnected global capital market,' he said.
Mr Green argued that global banks such as HSBC were too integrated. 
'It would be impractical to say banks can only provide three kinds of commercial banking services a client needs, but they have to go elsewhere to get the fourth,' he said.
The British government is about to release a white paper on bank reform. It has delayed publication twice because regulators and politicians are fighting among themselves over whether domestic banks should be carved up or simply made more conservative. 
HSBC is one of the fittest credit crunch survivors. It raised US$18.7 billion from shareholders in April and has not taken government money.
Mr Green sees the financial meltdown as a big opportunity for HSBC to grow in Asia by attracting customers and snapping up competitors.
Analysts have warned that if the British government stops banks from expanding, they will leave the country, but Mr Green said HSBC would not do so.
'There are a lot of people in HSBC whose hearts are in Asia. We never forget that well over two-thirds of our business is in Asia,' he said.
HSBC conducts a formal review every three years of where it should be domiciled but was at present headquartered in London and had no plans to change that, said Mr Green. The next review is in 2011. 
Mr Green predicted the white paper would not make radical calls to demolish banks.
'I don't think bringing in something like the Glass Steagall again is implementable,' he said, referring to the American law forbidding deposit-taking banks to trade investments that lasted from 1933 to 1999.
Mr Green said it was unlikely that Britain would  call for banks to be broken up. 
In his personal capacity, Mr Green, an ordained Anglican minister, has written a new book, called Good Value. 
It ponders the moral and spiritual lessons to be learned from the financial crisis and defends capitalism and economic progress as solutions to world poverty.
Good Value: Reflections on Money, Morality and an Uncertain World is published by Penguin



HSBC chairman defends global expansion, rejects break-up call