Sarkozy criticizes capitalim
Obama promised that “never again will the American taxpayer be held hostage by a bank that is too big to fail.”
But bank leaders gathering in the Swiss ski resort lined up to slam the proposals. “I’ve seen no evidence that suggests shrinking banks is the answer,” said Barclays President Bob Diamond.
“If you step back and say large is bad, and we move to narrow banking, the impact of that on banks and on global trade, the global economy, would be very negative.”
A poll by PriceWaterHouseCoopers released in Davos, revealed that 60 percent of CEOs are “extremely concerned” by the threat of over-regulation, with a further 27 percent describing it as the biggest threat to business group.
But Sarkozy told delegates that the risks are too great if “we do not change the regulation of our banking system and the rules for accounting and prudential oversight.”
He added that “there are remuneration packages that will no longer be tolerated because they bear no relationship to merit.” He dubbed it as “morally indefensible” when companies that “contribute to destroying jobs and wealth also earn a lot of money.”
He then directed his wrath at “reckless free trade and currency manipulation,” as he acknowledged Obama’s appeal for banks to be dissuaded from engaging in proprietary speculation or financing speculative funds.
The attendees included Deutsche Bank AG CEO Josef Ackermann, Credit Suisse Group AG CEO Brady Dougan, Barclays Plc President Robert Diamond and HSBC Holdings Plc Chairman Stephen Green. Leadership of many industries hold these private meetings at the World Economic Forum every year.