By Jonathan Davies

The deputy governor of the Bank of England Andrew Bailey has said that HSBC is right to consider moving its headquarters out of the UK.

The bank last month revealed that it was considering moving out of London, and possibly the UK.

"We will obviously be in close contact with them because there are important issues for us," Mr Bailey told the Reuters Financial Regulation Summit.

"It is entirely natural that as an institution your shareholders should demand that you do this assessment. As a private organisation they should do it," he said.

HSBC moved from Hong Kong in 1993 when it bought Midland Bank. And its focus on the Asian market means the bank has been widely tipped for a move back to Hong Kong.

The potential moves comes as the UK government introduces new regulations on banks, forcing them to separate their retail and investment businesses.

"Some of them are coming with quite big changes to their plans, because they've had a think about it and revised their view on where their business model is headed," the Bank of England deputy governor said. "Their business models are adjusting so these are moving targets."