He told BBC Radio Bristol: "I think for Football League clubs you shouldn't have loans - or they should be very, very restricted.
"I'm not a big fan of the system, but I do realise that is the game we have to play now - which is unfortunate."
He added: "These youngsters would have come anyway, for free. All the Championship clubs are just fattening lambs for slaughter.
"Talented youngsters - who can't get a game in the Premier League club's first team or reserves - are coming here, getting some real value added, then being sold on to Championship clubs at benefit to [the parent] clubs."
So far this summer City have signed Barnet winger Albert Adomah and Reading midfielder Kalifa Cisse.
Source: BBC Sport
Source: BBC Sport