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Bob Diamond, the president of Barclays Capital, has laid into Barack Obama's plans to limit the size of the banks, warning that what he sees as an electioneering, populist crackdown would be bad for the global economy.

Speaking on the opening day of the World Economic Forum in Davos, Diamond insisted: “You have to step back from the rhetoric. I have seen no evidence ... to suggest that shrinking banks and making banks smaller and narrower is the answer. If you step back and say too big is bad ... the impact of that on global trade, on the economy, could be very negative.”

He conceded that there had been the failure of a "couple of banks" caused by poor regulation and ineffective management, particularly around management of risk, but insisted that the growth in "large, integrated, universal banks" had been a response to market forces in the post-communist world.

"They [the big banks] fulfilled an important function in helping governments and corporates to transfer risk, particularly across borders,” he argued. “Did banks get big because they wanted to or were they following their clients, their customers and the markets? Was it for an economic purpose?"

He said it was up to the G20 group of developed and developing nations to establish "an effective regulatory framework to have better managed, integrated, universal banks". He said: "I think that what goes unnoticed is that the banks which stayed strong and were well managed through this are angry at the banks (that) had poor management (and) were allowed to have poor management and ineffective regulations.”

He added that it was important not to try and drive all risk out of the system. "It is very important to step back and be very thoughtful about the role of trading and the role of risk in banks, because without risk we don't have a banking industry," he said. "We want to have a safe and sound financial system and we want to have jobs and we want to have economic growth. Having banks that are willing to take to risk, particularly cross-border risk, is essential for having jobs and economic growth."

In a clear warning shot at other governments, Diamond warned that Isolated actions by individual governments were not "beneficial" and international co-operation was vital if banks with global operations were to be regulated effectively. “Isolated actions in the U.S. and U.K. aren’t beneficial when compared with the opportunity we have to work constructively through the G-20,” he said.  “The one thing I ask for is that regulation is connected between the major economies around the world.”

Barclays did not take direct money from government during the banking meltdown. "Yet we recognize that we benefited from the incredible monetary and fiscal stimulus," Diamond said. "But here's the important point, so did everyone! So did every government, every private equity firm, every asset manager. The system was saved."