Could 'Brexit' cost London its financial hub status?

Brexit would weaken the City: Bischoff

Quitting the European Union (EU) would cost London its title as the financial and professional services capital of Europe, City heavyweight Win Bischoff warned on Tuesday.

Bischoff, who was until recently chairman of Lloyds Banking Group, said that calls by some U.K. politicians for Britain to leave the 28-country union should be ignored, for the good of both the country and the rest of Europe.

"Over a period of time, particularly the international side of (London's) financial and services business would go elsewhere," Bischoff told CNBC.

"London would continue, obviously, as the U.K.'s financial sector. It would lose its position as the EU's financial center."

Chris Ratcliffe | Bloomberg | Getty Images

Bischoff warned of a "slow and perhaps accelerating departure" of capital from London if the U.K. were not part of the EU.

"It is very clear that if the headquarters move to Europe or elsewhere, that other people will move, and there will be this diminution in the importance of London," he said.

The rest of Europe benefited from the U.K.'s pro-financial sector stance, according to Bischoff, especially with regards to debates on the likes of salary caps for bankers, bans on short-selling and financial transaction taxes.

"(At present), these kinds of things are either being faced down, or we have a say in how they are going to be adopted, while we are still in the EU," he said.

"One of the problems that we see is that if you are outside, you won't have a seat at the table and you won't be able to influence European policy."

Read MoreUK housing boom spreads out of the capital

Bischoff, a veteran banker who was chairman of Citigroup prior to joining Lloyds, will head up the U.K.'s Financial Reporting Council, an independent regulator charged with monitoring corporate governance, from the beginning of May.