Bankers line up to slam 'over-regulation'

27th Jan 2010 13:37

World bankers presented a united front in condemning moves to regulate the industry further with chief after chief stepping up at the World Economic Forum in Davos to slam planned bank reforms.Bob Diamond, Barclays president and head of its investment bank BarCap, led the assault. "If you say that large is bad and we move to narrow banks the impact on jobs and the global economy will be very negative," he said, adding "I have seen no evidence to suggest that shrinking banks and making banks smaller and more narrow is the answer".While he admitted anger at rivals that failed due to 'poor management and poor regulation', he said 'This is a time when isolated action in the US and UK is not beneficial'.Other bank leaders were also dismayed by attempts to curb their activities. Peter Sands, the chief executive of Standard Chartered, said banking had been 'fundamentally changed' by tighter supervision and governments were now in danger of causing future problems by over-regulation. "The stakes are very high," he said. "If we get it wrong in one dimension, we will end up stifling growth. If we get it wrong in the other dimension we end up with another crisis".Echoing those sentiments, Deutsche Bank's chief executive Josef Ackermann warned "We could all be losers in the end if we don't have an efficient market in place any more," adding that moves to restrict the size of banks would lead to small players, ill-equipped to cater to the needs of global trade.Last week, US President Obama stunned the US banking sector by unveiling plans to limit the size of banks operating in the country and also to restrict their proprietary trading, hedge fund and private equity activities. In the UK, the government has moved to curb bonus payments to bank staff.