Managers warn UK banks could be hit hard by Obama reform

Fund managers believe Barclays, HSBC and Royal Bank of Scotland are the UK banks most likely to suffer if the latest US plans to curb risk taking in the sector are effected.

Yesterday, Barack Obama proposed banning US banks owning, investing in or sponsoring hedge and private equity funds, and from conducting inhouse trading. Matthew Hudson, manager of Cazenove's UK Equity Income fund, says banks in the UK investment banking arms exposed to the US, such as Barclays, HSBC and RBS, will bear the brunt of regulatory reform. By mid-morning, Barclays was down 5.7% to £2.66 while HSBC fell 2.7% to £6.57 and RBS fell 5.6% to £33.4p. Hudson says: "Reducing the size of prop trading activities, and activities in private equity and hedge funds will impact investm...