The chairman of investment bank Barclays Capital, Hans-Joerg Rudloff, has criticised President Barack Obama's plans to rein in US banks as "populist" in a newspaper interview published on Sunday. Rudloff acknowledged in the Swiss newspaper "Sonntag" that the financial services industry was on the threshold of major change.
But he said that the tone of Obama's appearance last Thursday, when he announced a crackdown on the scope and size of big US banks, did not fit with attempts to forge dialogue between business and government. "It can only be regarded as a populist diversionary tactic after a huge setback for the Democratic Party," Rudloff told the newspaper.
The chief executive of the investment arm of the British banking group said the proposals to fence off different parts of the banking business and limit the size of big banks were "vague," poorly thought out and hard to implement. "We banks are conscious that new regulation will be aimed at better protecting savings and deposits. Banks would thus be obliged to speculate less," he said.
"However that doesn't in any way mean that one should simply pull regulations from the last century out of mothballs," Rudloff added.
The US proposals have been compared with the 1933 Glass-Steagall Act, which prohibited commercial banks from underwriting corporate securities, or acting as brokerages. It was repealed in 1999.
Rudloff said banks would have to change their "culture." "We are at the beginning of a new chapter in the history of finance and certainly face a restructuring of the whole industry," he added. Barclays Capital took over the North American business of Lehman Brothers, the huge US financial services firm which went bankrupt in September 2008, precipitating the collapse in stock markets and the financial crisis.