The world's securities firms are poised for 10 years of growth,according to Hans-Joerg Rudloff, the former chairman of thatbusiness at Barclays Plc.

“Investment banking has a brilliant future,” Rudloff, 73, saidin an interview in Milan on April 16, making his first publiccomments on the business since retiring from Barclays in February.“The industry is looking at a golden decade.”

The growing need for capital will propel profits, oncesecurities firms finish adapting to tighter rules designed toprevent a repeat of the financial crisis and shield depositors fromtrading losses, said Rudloff, who during his five-decade careerhelped foster the expansion of the Eurobond market in the1980s.

“It isn't about trading with the firm's money, but aboutallocating capital and playing the intermediary” by originating,packaging, and distributing all types of securities, includingderivatives, he said.

Wall Street firms, constrained by regulations that banproprietary trading and capital rules that more heavily weightrisky assets, are facing a prolonged slump in fixed-income trading,which has fallen in nine of the past 13 quarters.

Barclays has retreated from that market since 2011, leaving theLondon-based bank with a roughly 12 percent share among the eightbiggest firms in 2013, according to data on the fixed-income,commodities, and currency markets compiled by Bloomberg.

“What we're seeing in FICC is the effect of derisking, adjustingto new leverage and capital rules—they're huge factors,” Rudloffsaid. “Where people are suffering now is in proprietarytrading.”

Barclays's management is facing demands from shareholders for aclear strategy for the securities unit, the biggest source ofincome for Britain's second-largest bank, amid decliningprofitability. Barclays said this month that it will present a planon May 8 to deliver “improved and sustainable returns andgrowth.”

While Rudloff was at Barclays, where he spent 16 years aschairman of the investment bank, the firm morphed into afixed-income specialist, having sold its equities business in 1997.It returned to underwriting and trading stocks in 2008 with thepurchase of Lehman Brothers Holdings Inc.'s North Americanoperations out of bankruptcy.

“Investment banks are two-thirds down the road of adapting, andthe U.S. banks are further down the road because they've beenfaster at adjusting,” Rudloff said. “The No. 1 winners will be theAmerican firms and the Europeans which are able figure out theirroles.”

Ukraine Tensions

Rudloff started as a trainee at Credit Suisse in Geneva in 1965.An economics graduate from the University of Bern, he joined KidderPeabody International Ltd. three years later and returned to CreditSuisse First Boston in London in 1980. There he helped expand thefirm internationally, including in Russia, where Credit Suisse grewto become one of the largest international investment banks.

For Rudloff, chairman of Marcuard Heritage AG, a Swiss wealthmanager which oversees about $3 billion, Russia and the Ukraine crisis are the greatest threat to global economicgrowth and prospects for an investment-banking expansion.

“The attitude of Western powers toward the crisis, if youanalyze it, what they're saying is that they'll wage war withdifferent means—financially, economically, diplomatically,” Rudloffsaid. “If that's the intention, what has driven the last 25 years'of development—that is, globalization—will come to an end.”

Four-way talks in Geneva ended April 17 with an agreement aimedat taking the first steps toward de-escalating tensions in Ukraine,after Russian President Vladimir Putin said he hopes he won't haveto send in troops. The U.S. and its European allies demanded Russiahelp calm the crisis or face new sanctions. A week earlier, theObama administration told asset managers it was planning additionalsanctions.

The existing measures are already starting to reverse capitalflows. Investors have been selling Russian securities, causing itscurrency to fall 7.6 percent against the dollar this year, whileRussia's holdings of U.S. government securities fell to the lowestlevel since 2011 in February, Treasury Department data show. Retaildeposits in Russian banks declined by 2 percent, according tocentral-bank data.

“Russian banks' access to short-term funding has gone, they'rerelying on the central bank,” Rudloff said. “There will be ahuge credit crunch.”

Beyond Russia, “a divided world would come if we force countriesinto isolation,” he said. “Economic growth would take a huge hit.It's the biggest regression the world could make economically.”

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