World Economic Forum 2010

Bankers get the cold shoulder in Davos

Stephen Beard Jan 28, 2010
World Economic Forum 2010

Bankers get the cold shoulder in Davos

Stephen Beard Jan 28, 2010


Kai Ryssdal: Unless you’ve got a private jet to take you there, Davos isn’t the easiest place in the world to get to. It’s a two-and-a-half hour train ride from Zurich. Just a little bit shorter by car. Maybe that sense of isolation is why the World Economic Forum is there in the first place. But once you get into town, the atmosphere inside the Congress Center itself can be a little insulating.

Because for all the congeniality that Dan Shapiro was just talking about, there is a group of people at the conference this year that isn’t all that popular, but they are trying. Marketplace’s European bureau chief Stephen Beard is in Davos for us this week.

STEPHEN BEARD: The Davos Yodeling Club, a good place, perhaps, to seek out some real, Swiss opinions. While hundreds of foreign VIPs debate the issue in the center of their town, who do the locals blame for the economic crisis?

YODELLER: The banks, the managers of the banks, they have to learn really a little bit from this crisis. And they should reduce the bonus, that’s the big item here. That’s also my opinion to these people.

And on the T.V. news more anti-banker sentiment from the Swiss president speaking at the World Economic Forum.

SWISS PRESIDENT: Bankers are already trying to wriggle out of their responsibilities…

Drinkers in this small bar nodded vigorously as they watched. Bar owner Tina Schmid says the Swiss are no different from anyone else. They don’t like bankers.

TINA SCHMID: No, no this is very, very bad. Nobody’s happy with the banks.

And that in a country where banks in the past were a major source of national pride. It shows how much of a mountain the bankers have to climb.

Meanwhile back at the forum — in the center of Davos — the bankers are struggling to win back some public and political support. Many stayed away from last year’s meeting. This year they’re back, lobbying the many governments represented here, arguing the case against a regulatory crackdown.

Here’s the head of Barclays Bob Diamond in the forum’s opening session. He criticized President Obama’s plans to cut the big banks down to size.

BOB DIAMOND: I’ve seen no evidence. I’ve seen no academic study. I’ve seen no analysis that suggests that shrinking banks and making all banks smaller or more narrow is the answer.

He says Mr. Obama’s plan to tax and curb the banks will cut off credit and prove totally counterproductive.

DIAMOND: The impact of that on jobs, the impact of that on the economy — particularly global trade and the global economy — would be very negative.

And it would drive business away from Wall Street. That’s the view of Lord Levene — head of the British insurance giant Lloyds of London. He says that in the past, tough U.S. regulations like the Sarbanes-Oxley Act proved a boon for Britain’s finance industry.

LORD LEVENE: In the city of London, we wanted to build a statue to Messrs Sarbanes-Oxley for delivering so much business to us.

But the bankers have not been entirely among friends at the Forum. Norway’s top businessman, who makes fertilizer, unleashed a mini torrent of abuse.

Harvard Professor Niall Ferguson was also critical, saying that some banks were too big for anyone’s good.

NIALL FERGUSON: Too-big-to-fail institutions now dominate financial markets on both sides of the Atlantic and if we leave that situation intact, I’m afraid we’re planting the seeds of the next big crisis.

Billionaire financier George Soros also weighed in here against the big Wall Street banks. He said they were tone deaf to the public outrage. Outside the conference center that outrage seems to be swelling. It may be some time before the Swiss learn again to love their bankers.

In Davos, this is Stephen Beard for Marketplace.

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