US PRESIDENT Barack Obama issued a stark warning to bankers yesterday not to ignore the lessons of the demise of Lehman Brothers, in a hard-hitting speech marking a year since the Wall Street investment bank filed for bankruptcy.<br /><br />Obama said the US financial system was beginning to &ldquo;return to normalcy&rdquo;, but said that there could be no complacency about the state of the US economy and the future of the banking landscape.<br /><br />&ldquo;Unfortunately, there are some in the financial industry who are misreading this moment,&rdquo; he said.<br /><br />&ldquo;Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them.&rdquo;<br /><br />He added: &ldquo;We will not go back to the days of reckless behaviour and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.&rdquo;<br /><br />Obama&rsquo;s administration has been working on reforms to the financial services industry, which the President dubbed &ldquo;the most ambitious overhaul of the financial regulatory system since the Great Depression&rdquo;.<br /><br />The proposed regulatory landscape would hand America&rsquo;s central bank, the Federal Reserve, new powers over financial institutions, as well as the ability to take control of systemically important banks, a move Obama said would close loopholes in the system.<br /><br />A new consumer watchdog, the Consumer Financial Protection Agency, will be founded to protect mortgage, car and credit card borrowers, while the Federal Trade Commission will get new powers to look after the interests of consumers.<br /><br />&ldquo;By setting ground rules, we&rsquo;ll increase the kind of competition that actually provides people better and greater choices, as companies compete to offer the best product, not the one that&rsquo;s most complex or confusing,&rdquo; he said.<br /><br />Meanwhile, the Bank of England&rsquo;s executive director for financial stability Andrew Haldane said yesterday that new regulation would not restore the public&rsquo;s trust in the banking system and that banks might have to be smaller in the future.<br /><br />Speaking at the Association of Corporate Treasurers in Leeds, Haldane said that there needed to be a self-generated sea-change in the structure and strategy of banking.<br /><br />He argued that the shape of the future financial landscape may need to consist of smaller and more specialised institutions.<br /><br />&ldquo;There is not a scrap of evidence of economies of scale or scope in banking &ndash; of bigger or broader being better beyond a low size threshold,&rdquo; he said.<br />