Bankers, economists clash over regulation
Source: Agencies |
January 28, 2010, Thursday
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Print Edition
Print Edition
UPBEAT bankers clashed with pessimistic economists on the opening day of the World Economic Forum, where the movers and shakers of global politics and business argued over whether to move forward with financial reforms, or to abandon what some claim would be a ruinous path toward over-regulation.
Just hours ahead of US President Barack Obama's first State of the Union address, bosses from Deutsche Bank, Lloyd's and other financial giants warned yesterday that a flood of new regulations risked choking off a global economy recovery.
Others urged Obama, who has proposed restricting bank risk-taking, to push forward with stronger reforms.
The discussions in the rarefied air of the Alpine resort of Davos in Switzerland, reflected the broader debate and anxiety over the global economy, and how to address an uneven recovery powered by a booming China and held back by high unemployment in the United States and other wealthy nations.
Pendulum swing
"Let's get good regulation, better regulation, but not more regulation," said Peter Levene, chairman of British bank Lloyd's.
Deutsche Bank Chairman Josef Ackermann said "we will all be losers" if governments clamp down on markets too zealously.
"The pendulum might have swung too far," Ackermann warned. "Consistent and global rules, and a level playing field is absolutely key to the global economy."
Obama was expected to push for greater regulation of Wall Street, and there are calls in the US and Europe for tougher taxation on financial institutions to recoup the billions governments have doled out in rescue packages since 2008.
Coupled with the high unemployment much of the rich world is experiencing, there is strong public pressure for action against the sectors that were so deeply involved in leading the world into recession. Some economists said more must be done.
Not enough
"Obama's proposals on banking regulation are finally going in the right direction ... but they are not enough," said economist Nouriel Roubini, who gained prominence for predicting the financial and economic crisis.
Roubini, dubbed "Dr Doom" for his grim assessments, suggested separating commercial and investment banking, and other steps to avoid a return to "business as usual" for banks.
The five-day gathering was assessing a host of other issues facing the planet, from disaster aid in the aftermath of Haiti's devastating earthquake to climate change.
But the most pressing concern was steadying a shaky world economy.
"China alone cannot be the only engine of global economic growth," Roubini warned. "In the first half, you are going to see the effects of the fiscal stimulus ... in the second half of the year you will see a fall in the US, Europe and Japan."
Just hours ahead of US President Barack Obama's first State of the Union address, bosses from Deutsche Bank, Lloyd's and other financial giants warned yesterday that a flood of new regulations risked choking off a global economy recovery.
Others urged Obama, who has proposed restricting bank risk-taking, to push forward with stronger reforms.
The discussions in the rarefied air of the Alpine resort of Davos in Switzerland, reflected the broader debate and anxiety over the global economy, and how to address an uneven recovery powered by a booming China and held back by high unemployment in the United States and other wealthy nations.
Pendulum swing
"Let's get good regulation, better regulation, but not more regulation," said Peter Levene, chairman of British bank Lloyd's.
Deutsche Bank Chairman Josef Ackermann said "we will all be losers" if governments clamp down on markets too zealously.
"The pendulum might have swung too far," Ackermann warned. "Consistent and global rules, and a level playing field is absolutely key to the global economy."
Obama was expected to push for greater regulation of Wall Street, and there are calls in the US and Europe for tougher taxation on financial institutions to recoup the billions governments have doled out in rescue packages since 2008.
Coupled with the high unemployment much of the rich world is experiencing, there is strong public pressure for action against the sectors that were so deeply involved in leading the world into recession. Some economists said more must be done.
Not enough
"Obama's proposals on banking regulation are finally going in the right direction ... but they are not enough," said economist Nouriel Roubini, who gained prominence for predicting the financial and economic crisis.
Roubini, dubbed "Dr Doom" for his grim assessments, suggested separating commercial and investment banking, and other steps to avoid a return to "business as usual" for banks.
The five-day gathering was assessing a host of other issues facing the planet, from disaster aid in the aftermath of Haiti's devastating earthquake to climate change.
But the most pressing concern was steadying a shaky world economy.
"China alone cannot be the only engine of global economic growth," Roubini warned. "In the first half, you are going to see the effects of the fiscal stimulus ... in the second half of the year you will see a fall in the US, Europe and Japan."
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