WORLD ECONOMIC FORUM: A recurring view at Davos is the financial whiz kids have gone back to their old ways
IF ANY OF the ubiquitous management consultants at Davos did “a confidence survey” at the late-night parties they hosted, they’d get a pretty inaccurate view of the state of the world. If back-slapping and shoulder- rubbing was a gauge, there is no economic wreckage to repair.
The alleged, grandiose aim of the World Economic Forum, the organiser of the Swiss think-in, is “improving the state of the world”, though one reveller asked early yesterday morning at a so-called Davos “nightcap” party: “Don’t you mean observing the state of the world?”
This is a pretty accurate view of the public Davos. In open debates, senior bankers constructively and gently dismiss the Obama plan to rein in and potentially break up America’s biggest banks, forcing them to pre-fund future crises with a $90 billion tax.
But in private they are frantically lobbying the powers that be – and in Davos they’re everywhere – in concert to call a halt to what they see as an Obama solo run and knee-jerk reaction to the Democratic Party’s loss of Teddy Kennedy’s Massachusetts Senate seat. These influential policymakers include US ˜congressman Barney Frank, chairman of the House Financial Services Committee. “There’s no way it will clear Congress,” one senior banker confided.
There’s a recurring view at Davos among non-bankers that the financial whiz kids have gone back to their old ways and that it’s business as usual. Not so, say central bankers who, again in private, are livid that banks have returned to what they know best – massive bonuses. The sense is that there will have to be large global regulatory put-down to teach them a lesson (again).
“Bankers need to go back to Banking 363,” said a Davos observer, “where they take in deposits at 3 per cent, loan them out at 6 per cent and have time to make the golf course for 3pm.”
But some of Obama’s reforms haven’t exactly won over the more powerful figures at Davos. At a low-key media briefing (Davos offers this kind of access), UK chancellor Alistair Darling said the plans had the potential to distract from reforms already agreed by the G20 countries in London.
“Everytime you get someone else throwing a stone into the pool, everyone spends their time looking at that rather than at the hard work of implementing what you have already agreed,” he said.
A more interesting take on Davos came from film director James Cameron, who was in the Swiss resort late on Thursday night to talk about his movie Avatarand its environmental issues and cinematic advances.
He wasn’t sure why he was here in Davos, he told the audience, because he knew nothing about global economics.
Then again, he thought, given what’s happened over the last two years, neither did any of the delegates who come to Davos year after year.
