If reading those words seem strange, imagine, for a moment, the anxiety that's running throughout the British Empire - or at least its financial community.  Barclays and other financial institutions anxiously await the final report on reforms by the Independent Commission on Banking ("ICB"). But Barclays may not wait - it's already hinting at a major change.  CEO Bob Diamond suggested at a recent conference that the bank may move its headquarters out of the UK.:  "It’s no longer a question of whether Barclays wants to stay in the UK but whether the UK wants Barclays."

Proposed new rules would require the bank to split its investment and retail halves, making it far more costly for Barclays and others to move capital between divisions.  Some estimates say that "frictional" costs could run as high as $20bn to $25bn per year.

While Mr. Diamond was speaking solely on behalf of Barclays, his comment nonetheless reflects the industry's lack of confidence in the coming ICB reforms.  Other major U.K. banks that would be affected include:  RBS, HSBC and Standard Chartered.  HSBC previously has discussed moving its headquarters to Hong Kong.

The ICB, which opened its doors in June 2010, is tasked with gaining more insight into the stability and workings of the U.K. financial system.  It also also was ordered to analyze and suggest ways for dealing with banks that are deemed "too big to fail."  So far, the ICB has suggested that large banks split their investment banking and retail banking divisions, although it's not assured that such a suggestion will make it into the final report version that's due out in September.    [Trefis, 8/12/11]