Bob Diamond: In the post-crisis world, regulatory reform is too big to get wrong

My career in financial services spans 30 years and three different geographies – the US, the UK and Asia – and for me this is an especially important time to talk about what's happening in the industry, particularly in respect to regulatory reform. As regulators around the world formulate their response to the near collapse of the financial system the potential outcome is so important that I've chosen the title "Too big to get wrong" for my talk this evening.

Transatlantic relations are "too big to get wrong". Margaret Thatcher once said that "the Anglo-American relationship did more for the defence and future of freedom than any other alliance in the world". It's a strong assertion and it's underscored by President Obama's reference to "a link and bond that will not break". Our economies are deeply and closely interlinked: we each provide the largest source of foreign investment into each other's country, in trade and finance our relationship is well balanced, and there are strong cultural connections too: our fashion, design and music industries are major influences on each other and globally popular brand names fill each other's stores.

But just as our relationship is "too big to get wrong" so is the challenge now facing London and New York, the two largest financial centres in the world. They have a special interest in getting regulatory reform right. No city in the world has been more central to international trade flows and trading than London over the centuries and no city has benefited more than London either, a point which should not be lost in the debate.

But this subject is not just "too big to get wrong" for London and New York . It's also "too big to get wrong" for the world as a whole. We need reform that provides a safe and sound financial system – one that people can trust and rely on but we also need reform that fosters economic growth and job creation which are the most pressing issues we face today. Striking that balance is critical for all of us – and I mean for all of us because a healthy and strong financial sector that's willing and able to take risk, in particular cross border risk, is key to trade and economic growth. The banks have a vital role to play in this.

This is an extract from the Whitehead Lecture, given by the president of Barclays at Chatham House this week