Fieth admitted he feared that the market could become ever more homogenous.
He said: “I fear an environment in which different business models, non-vanillla lending, product innovation are seen as non-conforming and treated with suspicion.
“One of the fears that I have about regulation of all sorts is that it tends towards homogeneity. It tends towards trying to create entities that are the same. That can be compared with each other. That look alike. That are actually easier to regulate.
“What we really want, if we are to have a resilient sector come the next crisis; and there will be one – whatever it looks like, is a huge diversity that in a crisis has the opportunity to respond and react in different ways and to different degrees.”
It struck him that mutuals are left to interpret regulation developed for multinational and corporate banks.
Fieth added: “I think we should be talking far more about appropriate regulation.
“What I mean by that is regulation that recognises the value of a financial services sector that is truly diverse.
“That is far more resilient and competitive by having a diversity of business model and ownership structure.”