Economic forum opens in Davos
Global conference to focus on financial regulation and efforts to rebuild Haiti.
Christine Lagarde, the French finance minister, said she hoped “the Davos rendezvous will be fruitful for speaking about financial regulation. That means everyone has to be around the table.”
‘Off the rails’
Barack Obama, the US president, has proposed measures to to limit the size of big banks and make them repay much of the money needed for their bailout last year.
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Speaking to Al Jazeera from Davos, Suzanne Nora Johnson, a former Goldman Sachs vice chairman, said: “I actually think Obama and the bankers want the same thing, at the end of the day they want growth and stability, and you’re not going to get growth without risk back in the system.
“But clearly the risk was not applied correctly, and it went off the rails, and stability has to be the name of the game now, before we can get back to the growth agenda.”
Johnson said that the key to any future globalisation of financial regulation was that “everybody has to play by the same set of rules”.
‘Populist crackdown’
Many global business leaders have warned that any populist crackdown on the financial industry could hamper a fragile recovery from recession.
Bob Diamond, president of Barclays, challenged Obama’s effort to limit the size of big banks, telling a forum session: “I have seen no evidence … that shrinking banks is the answer.
“If you step back and say too big is bad … the impact of that on global trade, on the economy, could be very negative.”
A poll by accountancy firm PriceWaterHouseCoopers released before Davos said 60 per cent of chief executives are “extremely” or “somewhat” concerned about over-regulation.
Dennis Nally, global chairman of PricewaterhouseCoopers, said: “It would be unfortunate if regulatory reforms that will be forthcoming were based on a populist message.”
“Unfortunately, what we are seeing is a number of actions that have taken place very much on a country-specific basis,” Nally told the Reuters news agency, warning of possible “unintended consequences”.
Davos is also likely to address international reaction to the crisis in Haiti, with discussions planned on rebuilding efforts and disaster aid.
Klaus Schwab, founder of the conference, has insisted that Haiti be a priority topic at the event.