Angela Knight, the chief executive officer of the British Banking Association, has warned against kneejerk reform of banking regulation by the UK or the EU.
Knight, who has previously worked as Economic Secretary to the Treasury, urged those considering reforms to look in detail at the possible impact of actions such as splitting up retail and investment banking activities, or of altering remuneration.
Speaking at the TMA (UK) annual conference, Knight went on to say that before changes to the banking rulebook were made financial institutions required time to bolster their balance sheets and enhance their liquidity.
She added that it was only the funding provided by investment banking which could allow retail banks to lend to businesses and homeowners.
Knight also warned that overly harsh regulation could simply lead to an exodus of talent to other financial centres with less stringent regulations.
In September the Bank for International Settlements (BIS) advocated a new set of financial rules, including a global minimum liquidity standard, to be introduced so as not to damage the prospects of global recovery.