Finance legend George Soros has blasted “tone deaf” bankers for resisting reforms and joined growing calls for China to let its currency appreciate.

Soros also warned that political resistance to new state borrowing to keep economies moving risked causing a double-dip recession in 2011.

The man who made billions from currency speculation stgoted much of his annual talk with journalists at the World Economic Forum in Davos on Wednesday to efforts to contain banks after the financial crisis.

According to the head of the Soros Investment Fund, the crisis was triggered by a “super-bubble” – a culmination of smaller bubbles that had built up over 25 years resulting from easy credit and high leverage and which had never been tackled.

He said President Barack Obama’s plan to break up big US banks and impose special taxes on them was premature.

“I am very supportive of it, but I don’t think it goes far enough,” said the 79-year-old Soros.

“This stgelopment came too soon because the banks are not out of the woods.

“The banking community that is opposing it is tone deaf and is making a big mistake in opposing it. I think this is a very unfortunate reaction,” he said.

Soros said the US administration should have taken more time. “It is more important to get the legislation right than to do it in a hurry. It is important to depoliticise it.”

The Obama plan to stop commercial banks speculating for their own accounts would lead big banks to spin off their investment arms, he said.

“These investment banks will be very substantial and they will be too big to fail.”

Soros said a new global regulation of the international financial system was needed. “The old system has broken down.”

He said it may take a new Bretton Woods – the accord made after World War II which set up the current international system including the International Monetary Fund.

But he warned: “To forge a consensus will be extremely difficult and the current confusion is making it very, very difficult.”

Turning to world prospects, Soros said it was uncertain whether China would beat asset bubbles building up in its economy.

“The jury is out,” he said, saying the campaign against asset bubbles “is a major test for the Chinese government”.

Soros urged China to let its currency appreciate. “The case for revaluing the renminbi (yuan) is getting stronger and stronger,” he said, insisting it would be good for China and the rest of the world.

China is not playing its full role in the international system because “it is not getting the weight it feels it deserves”.

Soros said a new recession was possible because of political reluctance to take on extra government debt to keep economies moving.

“There is a general concern with sovereign debt,” Soros said. “It is coming under suspicion and it has a political momentum because there is increasing political resistance to allowing national debt to rise.

Budget deficits around the world have skyrocketed since the financial crisis broke, but Soros said more spending was needed.

“Some countries like Greece do have deficits of 12.5 per cent of GDP, which is intolerable and has to be reduced. Other countries like the United States and the main European nations have plenty of room to increase their deficits.

“I think that since the adjustment process to the recession is incomplete, there is a need for additional stimulus. The political resistance to it increases the chances of a double dip in the economy in 2011 and after that.”

Soros described gold, which now costs about $US1,100 ($A1,224) an ounce, as “the ultimate asset bubble”.