Bank of England deputy governor David Clementi has warned the Basel Commitee for Banking Supervision that imposing tough rules, making banks set aside risk capital, could drive business away to less-regulated insurance companies.

“It makes no sense to introduce a Rolls Royce system of capital adequacy regulations for banks if we have not considered the ramifications for the financial system as a whole,” Clementi told the conference.

However, he is not calling for a “level playing field” in the way banks and insurance companies are regulated because of the differences in the two sectors.