Financial Regulatory Forum

Major global banks split on regulation battle

By Lisa Jucca and Martin Howell

DAVOS, Switzerland, Jan 29 (Reuters) – The world’s top financiers are at odds about how to fight back against a global push for tougher financial regulation, with commercial and investment banks struggling to reach common ground.

Top executives from Wall Street and Europe’s leading banks have been holding behind-the-scenes talks at the World Economic Forum in the Swiss ski resort of Davos, sources close to the negotiations said, but a deal has proved elusive.

Wall Street’s largest and some major European investment banks argued in favour of a tough common front against politicians who are calling for much tougher measures to regulate the industry in the wake of the financial crisis.

But they did not manage to win over the heads of some commercial banks who believe the industry needs to be more conciliatory, the sources with knowledge of the talks said.

“The tough line of the large investment banks is very different than the approach of the major commercial banks,” said one of the sources on Friday. “It looks like it is very difficult to reach a common position.”

Wall Street hits back at Obama’s bank plan

By Martin Howell and Tamora Vidaillet

DAVOS, Switzerland, Jan 28 (Reuters) – Wall Street executives welcomed U.S. President Barack Obama’s plan to create jobs and a softening of his attack on banks, but questioned on Thursday whether proposals in his State of the Union address would become law.

Obama pushed job creation to the top of his agenda in his annual speech to Congress and vowed not to abandon his struggling healthcare overhaul after the loss of a key Senate seat in Massachusetts raised doubts about his leadership.

He renewed criticism of bankers’ “bad behavior” and of the recklessness that triggered the deepest crisis since the 1930s, but appeared to ease his assault on big banks.

BREAKINGVIEWS-Sarkozy’s anti-market rhetoric misconceived

– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –

By Hugo Dixon

DAVOS, Switzerland, Jan 28 (Reuters Breakingviews) – Nicolas Sarkozy’s anti-market rhetoric is misconceived. The French president used his address in Davos to blast the untrammelled free market. While the economic crisis has certainly exposed deficiencies in financial capitalism, this is largely because market forces were too weak rather than too strong.

Sarko had some easy targets. Top of the list were bankers. Their “heads-I-win, tails-you-lose” pay practices are an outrage. But these are not the result of the free market operating properly. They are the result of governments and central banks rushing in and bailing the industry out when it runs into trouble.

DAVOS – Business warns regulation may crimp recovery

By Ben Hirschler and Martin Howell

DAVOS, Switzerland, Jan 27 (Reuters) – Global business leaders warned Western governments on Wednesday that a populist crackdown on the financial industry could crimp a fragile recovery from the worst recession since the 1930s.

The worried response to U.S. President Barack Obama’s plans to curb big banks and a British assault on bankers’ pay came as 2,500 business leaders and policy makers met at the World Economic Forum in the Swiss ski resort of Davos.

Surveys produced for the annual conference showed global economic confidence on the rise after deep gloom in 2009 and a cautious return to hiring, especially in emerging markets.

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