James Moore: The man from the Pru is playing a dangerous game by making threats

So the man from the Pru is thinking of packing his bags and heading for Hong Kong. Yes, it is not only the banking industry that stomps its feet, raises its fists and threatens to stalk off when things look like they aren't going its way. Life insurers can do it too. It doesn't look any prettier, though.

But let's be fairer about this than those insurers have been to their customers for the past 20 years or so (which is one reason why the regulatory screw has been tightening so much and why they might lack sympathy).

The so-called Solvency 2 regime being imposed by Europe doesn't appear to be terribly clever. It could, in fact, be very damaging if (as has been suggested, although admittedly by insurance company bosses) it isn't just the insurers who suffer, but their annuitants and pension policyholders too. You don't really want a generation of people with money purchase pensions coming to retirement and realising that all that saving was hardly worth the effort.

It would also be damaging were Solvency 2 to force another shift out of equities by insurers. Their shareholdings have already been sold down once, as a result of the last set of regulatory reforms imposed by the Financial Services Authority at the worst possible time.

That set of reforms was hardly unjustified. The regulator had little choice but to act after a number of insurers had allowed themselves to flirt with insolvency through a combination of unhelpful markets and basic mismanagement.

A long-term savings institution going down doesn't have the impact of a bank going bust. Governments don't have to step in with truckloads of taxpayers' cash to avert financial armageddon. However, when it happens it is still ugly, and brutal on policyholders. One only needs to say Equitable Life to see that. However, thanks to the reforms and some hard lessons being learned the industry handled the financial crisis remarkably well. The trouble is European regulators aren't listening.

So Prudential has broached the nuclear option, perhaps as a way of prodding British officials into arguing its case more forcefully. It is playing a dangerous game here. Pru denies it is making threats, except that it is. And when you make threats people tend to react badly. In other words, this could easily be seen as another mis-step by Pru's management.

Shareholders might like to meditate on that for a moment. This is a company that has suffered far more from its managers than it has from its regulators down the years. It was Prudential's management which burned through hundreds of millions of pounds on two disastrously mishandled failed acquisitions.

Lest we forget, Prudential was also by a distance the worst mis-seller of personal pensions and for a long time dragged its heels when it came to sorting out the mess. Again, the blame lies with managers.

If the man from the Pru is going would we really be worse off for seeing the back of him?

Let's hope the behemoth HSBC is in safe hands

That HSBC is different was writ large yesterday. After a string of very disappointing if not downright dreadful results from the other UK-based banks, here's one that is doing exactly what banks are supposed to do (and used to do before lots of them started playing roulette), namely making pots of money. Actually, there are grounds to be disappointed. The second half was below expectations, and HSBC's costs are rising rapidly. There will be some pain to come as a result, pain that probably won't impact upon the phalanx of dollar millionaires on the bank's payroll, led by chief executive Stuart Gulliver whose package came in at £7.16m.

Nonetheless, when compared with its rivals, HSBC's star remains in the ascendant. One analyst yesterday noted that big in banking is dangerous. Very big, however, can be something wonderful. That may be over-egging it a bit, but Douglas Flint, the chairman, offered up an eye-popping list of crises that the bank not only lived through, but thrived through, just during his period of employment in a conversation with me yesterday. He maintains it is sensible, conservative, and focused on providing for its shareholders and that, this being the case, big need not be bad.

HSBC's biggest folly, its acquisition of US subprime lender Household, was hardly a product of conservative management and the unseemly boardroom spat over who should become chairman before Mr Flint was elevated (I don't believe he was involved in any way) was not a product of sensible governance.

The bank seems to have grown up a bit since then. We'd better hope this is the case, because having a bank as big as HSBC being the cause of one of those crises doesn't bear thinking about.

Gentleman insurer takes his leave on a high note

Mercurial, entertaining, witty, and politically incorrect, although not in an unpleasant way, Robert Hiscox is something of a lost echo of what the City is once reputed to have been. A capitalist, for sure, even a ruthless one. But also a gentlemanly one in stark contrast to the battery of well-groomed clones who dominate modern boardrooms.

Hiscox, the insurer that bears his family's name, had a tough time last year but the fact that it made a profit at all is something of an achievement given the £270m impact it faced from truly nasty catastrophes.

This will probably prove to be a blip, though. Under his chairmanship, Hiscox has gone from strength to strength. As he prepares for retirement, Robert Ralph Scrymgeour Hiscox says his secret has been hiring people with more talent than himself. Add self-deprecating to that list of virtues.