If governments around the world come down too hard on the banking sector with punitive regulation they could cause the economic recovery to stall, George Godber, senior investment manager from Charles Stanley, told CNBC Tuesday.
"If we get the banking regulation wrong we will end the recovery. That's a simple fact," Godber said.
"We have to be very careful with politicians who still can score points on both sides of the Atlantic attacking the banks," he added.
It's in the taxpayers' and consumers' interest to see banks rebuild their capital reserves because it would allow them to start lending to the economy again, Godber said.
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"It is the consumer on the street that will suffer if this regulation becomes too punitive and simply destroys the banks," he said.
Godber conceded that the banking sector hasn't done a good enough job of promoting itself and making the public aware of its beneficial activities.