U.K. Chancellor of the Exchequer Alistair Darling said Friday that bankers should stop complaining and get to work as international policymakers urged financial companies to support efforts to toughen regulation.
"My message would be [that], rather than feel sorry for yourselves, the best thing is to work with governments," Darling told reporters before meeting with bankers at the World Economic Forum in Davos, Switzerland. "It's in their interest to get off the front pages and do what they're supposed to do — provide credit to the economy."
Leaders of some of the world's biggest banks are meeting in Davos to plot how to reassert their influence with regulators and governments a week after President Obama shocked them with plans that may force large banks to limit their size and curb investments in hedge funds and private equity.
"There's a recognition among a number of bankers that can see the bigger picture that maintaining a standoff, swapping insults, doesn't work," Darling said. "Banks have to operate in the same world as the rest of us."
Canadian Finance Minister Jim Flaherty said bankers have "some work to do in terms of repairing their reputation."
"The way to do that is to work with governments," Flaherty said. "I think they recognize that change is necessary." This contrasted with the view of Hector Sants, the chief executive officer of the U.K. Financial Services Authority: "If they do get it, it's not obvious."
Bank chiefs, including Bank of America Corp.'s Brian T. Moynihan and Josef Ackermann of Deutsche Bank AG, were among those who met Thursday. "We're trying to figure out ways that we can be more engaged," Moynihan said after the talks. "Because, honestly, we were not considered to be the right kind of people to talk to for the ideas on how to fix this thing."
Flaherty and Darling said they would seek to use a meeting this week with fellow finance chiefs from the Group of Seven nations to reinvigorate the global regulatory push.
Weeks before Obama's crackdown, Darling imposed a 50% tax on bonuses of more than $40,310, a move that France followed. Europe and the U.S. are also at odds over whether to tax financial transactions. The Group of 20 promised in September to "raise standards together."
"Different countries have taken different steps," said Flaherty. "It's time we have a conversation about that and coordinate more."
Switzerland's top central banker, Philipp Hildebrand, praised Obama for taking the initiative.
"We should very much welcome the renewed emphasis the reform process has received" from Obama, said the president of the Swiss National Bank. "It's an illusion to believe that we can get away with marginal change."
Darling said that, though he did not intend to follow Obama's plan, the campaign for banks to increase the quality and quantity of their capital would have the same effect on proprietary trading. "Where banks are involved in risky activity, they must have capital requirements related to that risk," he said. "Once we come through this process, maybe there will not be as much difference as people think."
The U.K. official said international regulators should still work faster to carry out the G-20 nations' pledge to tighten capital rules. He said he was worried the Basel Committee may miss its yearend target to outline reforms.
"There needs to be a sense of urgency that has been absent in the last few weeks."
