HSBC’s chairman warned that the European Union's clampdown on bankers' pay would damage the City of London and Britain's economy, weakening both against competitors in Asia and the US.
Stephen Green also said that it would be wrong to break up the banks and that there was no connection between "the size of banks and failure". He added that London has now lost its leading position as the world's most competitive financial centre, with New York now equal, and Singapore and Hong Kong rapidly catching up.
And in a clear warning to the Government and the EU, he said: "That competition should focus minds. There are real risks both to London and to the economy as a whole from the law of unintended consequences if all those involved do not think very carefully about the policy framework and its implications."
On the subject of pay, Mr Green added: "The European Parliament's proposal on remuneration is a very clear example which raises questions about international co-ordination. It is a broadly sensible proposal, although aspects of it are still unclear.
"But if very different regulations prevail in the US, Switzerland and Asia, then it risks providing real incentives for a mobile population to arbitrage the rules to London's – and therefore the UK's – disadvantage," he added.
Mr Green further attacked the proliferation of levies and taxes around the world: "The current array of proposals is striking in its lack of consistency in terms of amounts, duration, basis of calculation and ostensible purposes. In the absence of global co-ordination, banks face distortions and could end up facing overlapping national and regional requirements that could result in double taxation."
He rounded on those who believe that the biggest banks – such as HSBC – are too big to fail and should be broken up with investment banking separated from retail banking.
"In one sense all banks are too big to fail. You can't put retail depositers into bankruptcy as you would a failing business. There is no correlation between size and failure. There is no model that is the right one," Mr Green said.
He argued that in fact "there is a real case for saying you need different types of model. Living wills have a role to play but small banking is not better than more mixed banking."
Mr Green added that while the economy is emerging from the financial crisis, it could be at risk of another shock. He was speaking after Angela Knight, the chief executive of the British Bankers' Association (BBA), who expressed similar sentiments. She said banks were an "easy target". "The blame game has gone on far too long. The time has come for a more measured and serious debate."
Mrs Knight said of efforts to reform banking: "What looked coherent 18 months ago is less so today. Even in quiet times, this is akin to three-dimensional chess, but today it is even more complicated than that as countries begin to peel off and do their own things."
She added: "The EU appears to be applying local requirements on an international industry. This is not about pin-striped individuals heading for a jumbo jet to Geneva. It is about shifting a significant amount of business out of the region."