Government regulators from the United States and Europe laid out their financial reform plans Saturday before a skeptical banking industry, asking financiers for input but adamant that change was coming with or without their support.
Emerging from the two-hour meeting as its unofficial spokesman, US Representative Barney Frank made it clear that governments were now calling the shots after spending billions to bail out the industry.
Top bankers, by contrast, who came into this week's World Economic Forum buoyed by signs of economic recovery, left somewhat subdued even as they called the closed-door meeting constructive.
"No one got up and said, 'Don't regulate us,"' said Frank, a Massachusetts Democrat who heads the US House Financial Services Committee. "It would have been a waste of their time if they did."
The meeting comes after days of tension at this Swiss Alpine resort over government plans for stricter controls on the financial industry to limit speculation and avoid a repeat of the 2008 meltdown that plunged the world into recession. Bankers have protested the new proposals, saying the U.S. and other countries risk choking off a gradual economic recovery with regulation they see as heavy-handed.
The event was not on the forum's official agenda, but quickly became the most significant development of the day. It also brought to mind some of Davos' previous high-profile conflict resolution efforts, including a Greek-Turkey accord to avoid war in 1988, as well as meetings between South African President F. W. de Klerk and the recently freed Nelson Mandela, and between Israel's then-Foreign Minister Shimon Peres and PLO Chairman Yasser Arafat.
"We are determined to do strong, sensible regulation," Frank said, rejecting any notion that President Barack Obama's administration could sink the economy again with too many new controls on the banking industry.
"That's nonsense," Frank told reporters. "What we're trying globally to recover from is a total lack of regulation."
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