Shareholders will force bank boards to exploit regulatory loopholes that are likely to emerge from the post-crisis landscape as the cost of financial regulation continues to mount, bankers warned yesterday.

Speaking during the "Big Debate" at Sibos, bankers lamented the ballooning regulatory bill and the inconsistency with which new rules are being applied throughout the global financial industry. They warned that regulatory arbitrage is unavoidable because shareholders will force bank boards to mitigate regulatory costs by seeking out more benign regulatory and tax regimes abroad.