HSBC used to hold a triennial review of its domicile policy, leading to periodic speculation about its return to Hong Kong, which remains its most profitable market. This ended, according to top executives, because bank regulations and tax changes were in flux after the global financial crisis, so there was no point to the exercise.

Now there is greater clarity to the regulatory environment, Europe's largest bank has reasons to think about relocating out of Britain as it retrenches and streamlines its operations. A list of disastrous investments and regulatory breaches in the US and Latin America still need to be rectified. So bank chairman Douglas Flint excited markets last week when he said HSBC was again studying "the best place ... to be headquartered in this new [regulatory] environment". A much higher bank levy facing HSBC in Britain is incentive enough by itself.

HSBC currently pays a US$1.1 billion bank levy in the UK, the highest of any British bank. If the Conservatives win the coming election, that would rise to an estimated US$1.8 billion. If Labour wins, the bill could be as high as US$2.3 billion. According to various estimates by analysts, a Hong Kong re-domicile would reduce the British levy to between US$600 million and US$800 million. That, coupled with Hong Kong's light regulatory tradition compared with Britain, may be enough to entice the bank back to the city.