Extra British regulations and taxes on banks will cost Barclays more than 1 billion pounds and Standard Chartered over $500 million a year and are part of a flood of reforms that could backfire, the bosses of the two banks said.

Banks are at risk from an avalanche of new rules and there is a danger they do not strike the right balance between protecting customers and letting banks help the overall economy, said Standard Chartered Chief Executive Peter Sands.

I am concerned that there is an avalanche of new regulations ... there is a real danger in the quantum and complexity of regulatory change, Sands said.

That trend had increased the argument for his bank, which makes the bulk of its profits in Asia, to move its headquarters away from London.

We get asked about our intentions on domicile in almost every single investor meeting, including in those with our UK investors, Sands said. Forty percent of its investors are based in Britain.

We don't have plans to leave, our preference remains to stay here in UK, he said, but added: The strength of argument to leave has grown.

Asked by lawmakers to estimate the cost in extra regulations of being based in Britain, Sands said: It's easy to get to a number north of $500 million a year, including the UK banking levy, which will cost it $190 million this year.

Barclays Chief Executive Bob Diamond, also being quizzed by UK politicians on reforms proposed by the Independent Commission on Banking (ICB), said the cost for his bank of those reforms would be at least 1 billion pounds.

He said it wasn't sure if the cost would be as high as 2 billion.

The ICB said its package of reforms would cost the industry up to 7 billion pounds, which Sands said was likely to be an underestimate.

Britain's Treasury is next week expected to adopt the bulk of the ICB's proposals, which are aimed at separating their retail bank arms to better safeguard the taxpayer.

The detail, scale and timing of some plans will have major cost and structural issues.

Sands said his biggest concern is the proposal to force banks to hold debt that can absorb losses for all of its assets, which he said was flawed in maths and logic.

Britain should wait for international rules on bail-in debt to be introduced rather than front-run them, he said.

Rival HSBC has estimated the ICB's bail-in debt proposal could cost it more than $2.1 billion a year.

(Editing by David Holmes)