Britain's banks have launched a strong intervention in the debate over the nation's membership of the European Union, calling for closer ties with Brussels and urging the government to raise its game in order to make the single market work.
The British Bankers' Association has sent a submission to a Treasury review that counters fears over the split of powers between London and Brussels, saying the current balance was "broadly appropriate". It added there was an "overwhelming" case for more resources to be devoted to relations with Europe and warned that the UK was significantly under presented in Brussels.
(Read more: Has the UK counted the cost of leaving the EU?)
In a sign of the concern in the City over the outcome of David Cameron's pledged referendum on EU membership, Citigroup has separately made an explicit warning to the Treasury about the costs for the UK economy if Britain were to leave Europe.
Citi said that if the UK were to disengage significantly or completely from the single market the implications could be "dramatic". The UK population would face a drop in living standards as a result of lower wages or a weaker pound so that the same export performance could be maintained within the EU.
Jim Cowles, Citi's chief executive for Europe, the Middle East and Africa, told the Financial Times of "mounting concern" among clients about their ability to continue using the UK as a regional hub if the country were to exit.
"It's not that international companies will stop investing in Britain, but their investment just won't be at the scale we have become accustomed to," he said.
The Citi and BBA interventions were made in submissions on financial services to the government's "balance of competences" review, which assesses the division of powers between Westminster and Brussels.