The British government previously said that the restrictions are not aimed at the Chinese. However, Gifford said more initiative can be taken by Britain.

He said that if the only barrier preventing the Financial Services Authority from permitting Chinese banks to open branches is the risk of bankruptcy, then the authority is able to speak to the China Banking Regulatory Commission, China's top banking regulator, about how to guard against such risk.

Gifford also said that the Financial Services Authority has not completely refused to let Chinese banks open branches, saying that he believes the authority has an open attitude.

However, Gifford said that while he supports and encourages increased dialogue on this point, the City of London does not have the power to bring about changes.

He said his team talks about this subject often with the UK Treasury.

"And what was said, was that, if it is a matter of the regulators understanding the individual banks better, then please let's increase the level of dialogue between the regulators," Gifford said.

He said all European banks can open branches in the UK, because there is agreement and understanding between UK regulators and these countries.

Gifford said there are many other countries whose banks are not allowed to open branches in the UK.

"For instance, many African and emerging market banks cannot open branches in London, because there isn't an agreement with their regulators," he said.