Antony Jenkins
Antony Jenkins, chief executive of Barclays, said the finance sector's "animal spirits" need to be boxed in Reuters

The global financial sector is destined in the long term to suffer another enormous crisis by repeating the same mistakes as before, according to Barclays chief executive Antony Jenkins.

From 2007 the world suffered its worst financial crisis since the Great Depression in the 1930s was sparked by the Wall Street crash of 1929.

An ultra-liberalised banking sector that relied heavily on unsustainable leverage went bang after an interest rate hike by the US Federal Reserve sparked a wave of defaults on the subprime mortgages underpinning trillions of dollars of securities held by financial institutions.

Moreover, the post-crisis clean-up of the financial system has dug up scandal after scandal, exposing fraudulent behaviour by bankers, from attempts to manipulate benchmark interest rates such as Libor to misselling financial products to unwitting investors.

"We will have another problem like this when all the people like us who carry the scars of this have retired or died," said Jenkins at the World Economic Forum (WEF) in Davos, Switzerland.

"What we need to do is find a way to box in the 'animal spirits' through profound change."

'Animal spirits' is a term used by the economist John Maynard Keynes in his 1936 work "The General Theory of Employment, Interest and Money". He used it to describe the instincts and emotions that guide human behaviour.

Governments across the world are reforming regulation of their financial sectors in order to tighten the grip on markets' behaviour.

They are also trying to put in place mechanisms to allow banks to fail without the need for taxpayers to prop them up as happened with numerous bailouts of institutions in the aftermath of the crisis.

Many were deemed too big to fail because of their size and the knock-on effect it would have had on the domestic and world economies.

In the UK, institutions will have to ringfence any retail operations from investment banking to protect ordinary depositors. They will also have to adhere to stricter capital rules which force them to hold more liquid assets against their liabilities than before the crisis.

Furthermore, finance workers caught acting recklessly or breaking the rules face tougher prison sentences and fines in a bid to force cultural change within the industry.