The future of Britain's banks is set to come under further scrutiny when a government-backed inquiry sets out its priorities for the industry.
The issue of whether banks' retail and investment operations should be split is to be looked at by a government inquiry into the banking sector.
The Independent Commission on Banking (IBC) is expected to say that it will look into the splitting of retail and investment banking operations.
The reform is one of a number of options being considered by the Independent Commission on Banking.
Critics say this could damage the UK's competitive edge and make banks flee.
Critics have said that such a split could damage the UK's competitive edge and make banks leave the UK.
The IBC, chaired by Sir John Vickers, was set up to look at financial stability and competition.
The ICB, chaired by Sir John Vickers, has been set up to look at financial stability and competition.
Shrink calls?
HSBC recently warned it would consider moving its headquarters from the UK if the commission recommended a break-up, while Standard Chartered has also recently questioned the future of its UK headquarters.
It will take at least a year to review whether investment banks should be split from deposit-taking institutions on the High Street.
'Hard questions'
Business Secretary Vince Cable has been vocal in calls for "casino" banks to be hived off from retail deposits.
The ICB will also look at whether what it calls "market concentration" should be reduced - something that could result in visible changes to the way the banks operate on the High Street.
But HSBC recently warned it would consider moving its headquarters from the UK if the commission recommended a break-up, while Standard Chartered has also recently questioned the future of its UK headquarters.
Other topics for scrutiny include whether banks should be restricted as to how much they should be allowed to use their own money for investment trading, as well as whether an institution should have a "living will" - a declaration of how a bank would wind itself down should any future financial crisis fatally undermine it.
Stuart Gulliver, head of HSBC's investment banking division, made the warning at a banking conference, saying he was "genuinely concerned" that the banking commission would recommend splitting up banks.
The ICB's five members have asked interested parties to give their views and are expected to question the chief executives of all of the UK's largest banks.
"[That] has significant implications clearly for where we may choose to headquarter our institution."
Sir John Vickers, the ex-chairman of the Office of Fair Trading, said: "Experience shows that the risks from not asking hard questions about financial stability and competition are far greater than from doing so."
"I want to be crystal clear. Our preference is to be headquartered in the UK," added Mr Gulliver.
He is joined on the commission by Clare Spottiswoode, the former director-general of Ofgas, Martin Taylor, a former chief executive of Barclays, Bill Winters, the former co-chief executive of JP Morgan, and Martin Wolf, the chief economics commentator at the Financial Times.
The commission is also likely to probe High Street competition - possibly leading to calls for the likes of Lloyds Banking Group to shrink.
Sir John, the ex-chairman of the Office of Fair Trading, is joined on the commission by Clare Spottiswoode, the former director-general of Ofgas, Martin Taylor, a former chief executive of Barclays, Bill Winters, the former co-chief executive of JP Morgan, and Martin Wolf, the chief economics commentator at the Financial Times.
It is expected that they will question the chief executives of all of Britain's largest banks.
One of those likely to be quizzed is John Varley, the Barclays boss who will hand over leadership of the bank next year.
Writing in the Financial Times, he said that the operations of investment banks were not like casinos, but he admitted they needed to do a better job of conveying their work to the public.
