The Business Secretary has warned that the government must take the possibility that HSBC will relocate its global HQ outside of the UK seriously.
Liberal Democrat Vince Cable said:
We have to take this threat of HSBC leaving the UK seriously even if it's not in itself surprising as they are a predominantly Asian bank, making 80% of their profits there.
But he added that HSBC may be alarmed by "the possibility of a Conservative-dominated government distancing the UK from the European Union and therefore losing any influence over the key decisions affecting the financial services industry".
Ed Miliband has said that the HSBC decision to consider moving its headquarters away from the UK is an example of the damage the Conservative party has done to the country's international reputation.
Speaking on Foreign Policy at Chatham House in London, the Labour leader criticised the Tory party plans for an 'in/out' referendum on membership of the EU.
Deputy Prime Minister Nick Clegg has defended the coalition government's tightening of banking regulations and the application of the banking levy in the wake of HSBC's announcement it may move its HQ out of the UK, saying on Radio 5 Live that:
This coalition Government has significantly tightened the rules and regulations around banking, quite rightly, because the banking system blew up in our face in 2008, we can never let that happen again.
I have to say as Deputy Prime Minister of this Government over the last five years, I make no apology for clamping down on excessive bonuses, on making sure the banks pay their fair share by paying much, much more tax through our banking levy.
The Liberal Democrat leader also added: "I hope HSBC will stay here in the United Kingdom, headquartered here, they are a big global bank and can obviously make their own mind up."
Labour's shadow Business Secretary has said that HSBC's announcement it may move its headquarters outside of the United Kingdom, highlights the importance of EU membership for the country.
Chuka Umunna said:
HSBC's statement today serves to illustrate how irresponsible it is to play fast and loose with the UK's membership of the EU.
It would be a disaster for our financial services sector and business in general if the UK left the EU. Better to stay in and lead reform.
Chairman of HSBC Douglas Flint has said that the bank faces a "very broad range of uncertainties and challenges" including geopolitical tensions and "eurozone membership uncertainties" - with debt-laden Greece facing a possible exit.
He also cited uncertainty of Britain's future in the EU, adding that its own research indicated that working towards reforms in Europe would be "far less risky than going it alone, given the importance of EU markets to British trade".
Mr Flint also pointed to positive trends in China, with the reshaping of its economy and further liberalisation of its currency, as well as the strength of the US.
Shares rose 3% on the announcement of the headquarters review.
The Chairman of HSBC, Douglas Flint, has said that is "essential" the banking giant is positioned in the best way to capitalise on future successes.
Speaking following the announcement that the firm may move its headquarters out of the UK, Mr Flint said that it was "essential that we position HSBC in the best way to support the markets and customer bases critical to our future success".
HSBC said last month that it was to relocate the head office of its UK retail bank to Birmingham by 2019, in a move that will see 1,000 jobs transferred from London, as part of this "ring-fencing" separating different arms of the business.
HSBC has made a "pretty clear criticism of Tory policy" in announcing a review of the location of its headquarters, ITV News Business Editor Joel Hills said.
The bank specifically warned of the "economic uncertainty" over the Britain's membership of the European Union when it announced it was considering moving its base out of the country.
HSBC also warns "one economic uncertainty stands out that of continuing UK membership of the EU". Pretty clear criticism of Tory policy.
Joel Hills also said the Government's bank levy had cost the bank £740 million last year.
80% of HSBC's profits are made in Asia. British HQ means bank has to pay government's Bank Levy. Last year it cost the bank £740m.
Banking giant HSBC is to carry out a review into whether to keep its headquarters in the UK, it has been announced.
In a statement, HSBC group chairman Douglas Flint said the bank was responding to "regulatory and structural reforms" in the industry in the wake of the financial crisis.
"As part of the broader strategic review taking place, the Board has therefore now asked management to commence work to look at where the best place is for HSBC to be headquartered in this new environment," he said.
Mr Flint added that it was "too soon to say how long (the review) will take or what the conclusion will be".
The statement also warned of the "economic uncertainty" of continuing UK membership of the European Union.
Sainsbury's supermarket has said it is planning to cut 800 jobs as part of a restructuring of its store operations.
It said the proposals, which would see the loss of department and deputy manager positions, would help achieve some of the £500m of cost savings being made over the next three years that were set out in the company's strategic review last November.