Financial elite at Davos can’t have it both ways
When it comes to hobnobbing in Europe with the hoity-toity, Cannes is the place to be during the film festival on the French Riviera.
But if you’re less about sun-splashed glamour and fancy gowns and more into cold hard cash and gray pinstripes, it’s the World Economic Forum for you.
The event under way at a Swiss ski resort has drawn more than 2,500 who ponied up a minimum $20,000 entry fee. Like with Cannes, the forum is simply known by the name of its host city, Davos.
The Davos “think tank” of financial power brokers has set a formidable agenda for itself. The three prongs of this year’s program: “Leading through Adversity,” “Restoring Economic Dynamism” and “Strengthening Societal Resilience.”
So, there you go. The world’s economic doldrums are about to be cast off — finally. Or maybe not.
As hard as it is to figure out what the delegates really want to do, it seems their primary dilemma is the same as it’s been since the world’s financial system was thrown for a loop in 2007.
How can these international financiers and national government officials wriggle away from blame for the Great Recession while simultaneously arguing to be left alone? Gee-whiz, shouldn’t the experts be allowed to run the world’s economy without petty rules and pesky regulators breathing down their necks?
Here’s how The Associated Press summarized the proceedings:
• Defensive bankers: Top bankers at Davos are defending themselves against calls for tighter regulations in the wake of the global financial crisis.
• Who knew? The financial crisis started when banks effectively admitted they didn’t have a full understanding of many of the investments they had been making.
• Too much, too fast? Jamie Dimon, chairman and CEO of JP Morgan Chase & Co., insisted many bad practices of the recent past were being phased out. Regulators, he said, were “trying to do too much, too fast.”
This is the same Jamie Dimon whose bank suffered a $6 billion trading loss on complex derivatives last year. This is the same Jamie Dimon whose 2012 pay was slashed in half by his own bank’s board to $11.5 million last week.
That’s a measure of accountability, at least. Now Dimon will be forced to survive on a salary commensurate with what a Major League Baseball team pays a run-of-the-mill southpaw who can pitch five innings. Quite the comeuppance.
During a panel discussion on global finance at the forum, Dimon criticized the “huge misinformation” about the risks actually posed by banks.
Hey, Dimon, pitch that screwball line to the community bankers and their small business customers who were forced out of the lending marketplace due to backlash from mismanagement by “too big to fail” financial institutions.
Regular players get three strikes. How many strikes do the “too bigs” at Davos get?