Forget terrorism, cyber-warfare and deadly viruses. Some European countries face a more imminent threat to their national security: Big banks could bring down the economy if they failed.

Right now, regulators are approaching it in different ways. The British may split up retail and investment banking. The Swiss are looking at almost doubling the recommended bank capital requirements.

Not surprisingly, the banks are fighting those proposals and claiming such measures would cripple their ability to compete in the global market.

There is a simpler solution, and one that would be fairer to the banks that are too big and the nations that are too small to host them: The lenders should move to a bigger country. Four banks in particular - HSBC Holdings, Barclays, UBS and Credit Suisse Group - should be making plans to leave Europe. An amicable divorce would be better for both sides.

There is no question that governments and financial regulators are right to be giving some serious thought to the issue of banks that have become too big to fail.

The near-collapse of Lloyds Banking Group and Royal Bank of Scotland Group during the credit crunch left Britain with a huge bill. In Switzerland, UBS had to be bailed out.

In Iceland, the meltdown of the financial industry has just about bankrupted the country. Ireland is still paying the price for the excesses of its banks.

Both Britain and Switzerland are aware that the collapse of HSBC or Credit Suisse would easily turn them into another Iceland or Ireland.

It would be irresponsible not to try to prevent it. It is as much of a threat to national security as the Soviet Union was at the height of the Cold War.

So how should they deal with that? True, better regulation is part of the answer. You need a lot of faith in the ability of the supervisors, however, to feel confident they can spot every crazy risk the bankers might be taking.

In reality, even the board may not really know what liabilities have been tucked away in some complex derivatives contract, and how they might blow up one day. It is impossible for outsiders to be certain.

Britain has set up a commission headed by John Vickers, an Oxford University professor and former Bank of England economist, to look at the possible separation of retail and investment banking, as well as banning proprietary trading.

In Switzerland, a government panel has recommended the country's biggest banks should hold capital equal to at least 19 per cent of their assets. That's almost twice the 10.5 per cent level the Basel Committee on Banking Supervision recommended last month.

They are both perfectly sensible proposals. Splitting up the banks would make the system safer. The investment arms take most of the risks. Hive them off into separate units, and if they go bust, it doesn't matter much to the rest of the economy.

Likewise, the more capital a bank holds, the safer it is. If there are big losses on an investment, then the money is there to cover them. It needn't be catastrophic.

HSBC and Barclays have both said they may relocate overseas if Britain moves to split them up.

In reality, both the banks and the regulators are getting this issue upside down. The problem isn't that the banks are too big.

It is that they have grown too large for the economies of the nations where they happen to be based. And once you put it like that, the solution is obvious.

Barclays and HSBC should leave Britain, while UBS and Credit Suisse should leave Switzerland.

It is rough on British or Swiss taxpayers that they have to shoulder the responsibility for huge banks that don't have much to do with their own economy - and most of whose staff are far better paid than the average taxpayer in either country.

And yet, it is hardly fair on the banks to be placed at such a disadvantage to their main competitors. Obviously, it's going to be impossible for HSBC and Barclays to keep up with Citigroup and BNP Paribas if they have to split their businesses.

And it will be tough for Credit Suisse to stay at the top of its industry if it has to hold twice as much capital as its international competitors. Capital, after all, is the raw material of banking. The less you have of it to play with, the less you will be able to do.

So why not just move elsewhere? That way, taxpayers are freed of the potential burden of a bailout, and the banks are released from rules that make it impossible to compete.

There is nothing that unusual about a bank moving when regulatory regimes change. HSBC has already done it before: In 1993, it moved its head office from Hong Kong to London, and the Bank of England became its lead regulator.

Where would the big banks go? China or the US would be possibilities. Of course, the US might not want another too-big-to-fail bank on its soil. But they would bring much-needed jobs and tax revenue. In the end, it is for the banks and local authorities to decide.

But as any marriage counsellor would concede, sometimes a relationship has been outgrown by both sides. And when it has, it is simply better to move on.

- BLOOMBERG