President Barack Obama said he was prepared for a fight with Wall Street over his proposals to split off the trading businesses from retail banks. It looks as if one of the world’s biggest banks, Barclays, is willing to take Mr Obama on.

Yesterday, the president of Barclays condemned proposals to cut banks down in size, or split them up, arguing it would do nothing to make the financial world a safer place.

“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,” Bob Diamond, who also heads Barclays Capital, the group’s booming investment banking arm, was quoted by media as saying at the annual World Economic Forum conference in Davos, Switzerland.

“I have seen no evidence to suggest that shrinking banks and making banks smaller and more narrow [will help]”, said Mr Diamond.

Mr Obama’s proposals, if they become law, would represent a partial return to the regulatory system that operated between the early 1930s and late 1990s, when investment banks were split off from retail, deposit-taking banks by provisions of the 1932 Glass-Steagall Act.

Critics of the proposals have already said that a number of financial blow-ups, such as the near-collapse of UK lender Northern Rock – which did not have an investment banking business – would not have been prevented by such legislation. And the takeover by Bank of America of debt-laden Merrill Lynch, for example, might not have been allowed by the Act.

Mr Diamond’s anger is fuelled in part by the fact that unlike some of its peers, Barclays has not been bailed out by the taxpayer, although like most of its rivals, it has been affected by the financial crisis.

Mr Diamond, who described himself as “incredibly proud” that Barclays had survived the crisis without direct bail-out money, also lambasted the unfairness of a regulatory crackdown that punished successful, well-managed banks as much as failed ones. “I am angry at banks that had poor management and poor regulation,” he said.

Although Mr Diamond recognised that regulatory demands for higher levels of capital and liquidity would be essential, describing “more intrusive regulation” as “a good thing”, he stressed that the new rules had to be “connected [across] the major economies around the world”.

Lord Adair Turner, chairman of the Financial Services Authority, the UK financial regulatory body, has indicated that he backs the broad thrust of Mr Obama's proposals. He was also attending the WEF conference in Davos. In recent months, Lord Turner has criticised some of the activities of financial market players, arguing that London's financial market is disproportionately large compared to the rest of the UK economy.