DAVOS NEWS - WHATS HAPPENING

WEF DAVOS
http://www.weforum.org/en/index.htm
2010 TRANSCRIPS
http://www.weforum.org/en/events/AnnualMeeting2010/Transcripts/index.htm

LIVE STREAM AT DAVOS 2010
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2006-2009 HIGHLIGHTS
http://www.weforum.org/en/events/ArchivedEvents/AnnualMeeting2009/index.htm

DAVOS HIGHLIGHTS JAN 27,10
http://wef2010.unitec-media.tv/20100127/20100127.html
DAVOS HIGHLIGHTS JAN 28,10
http://wef2010.unitec-media.tv/20100128/20100128.html
DAVOS HIGHLIGHTS JAN 29,10
http://wef2010.unitec-media.tv/20100129/20100129.html
DAVOS HIGHLIGHTS JAN 30,10
http://wef2010.unitec-media.tv/20100130/20100130.html
DAVOS HIGHLIGHTS JAN 31,10
http://www.weforum.org/en/events/AnnualMeeting2010/Sun31/index.htm

BLOOMBERG VIDEO FROM DAVOS
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Banks, Officials Find Common Ground at Davos Meeting (Update1) By Jana Randow and Aaron Kirchfeld

Jan. 30 (Bloomberg) -- Policy makers and bankers called a truce after a week of mutual recrimination at the World Economic Forum annual meeting, saying they agreed on the need for global financial regulations. On many aspects, we found common ground,Deutsche Bank AG Chief Executive Officer Josef Ackermann said in an interview today after a private session of bankers and regulators in Davos, Switzerland. There was better dialogue between business leaders, political and regulatory leaders than ever before.The meeting came after policy makers pushed back at bankers who had warned of excessive and uncoordinated attempts to toughen regulation following unprecedented government bailouts of the financial industry. Executives from Bank of America Corp., HSBC Holdings Plc, Standard Chartered Plc and JPMorgan Chase & Co. were among those in attendance. There are very important issues to which there needs to be input from the politicians, from the regulators, from the central bankers, from the private bankers and from the private sector, Adair Turner, chairman of the U.K.’s Financial Services Authority, said after the meeting. The purpose was to discuss the full range of issues. One of the topics was how to define whether an institution is too big to fail, meaning that its collapse would harm the entire financial system, according to John Sununu, a former U.S. senator who’s on the board of managers of Bank of New York Mellon Corp.’s ConvergEx Holdings LLC. He attended the meeting. Some people think you need to try, and others think you need to understand that small institutions with certain interconnectedness can cause systemic problems just as much as large institutions,Sununu said.Larger institutions can sometimes use their size to effectively diversify their risk.

Terms of Reform

We had good discussions and agreement among all the participants,said Brian Moynihan, the CEO of Bank of America, the largest U.S. bank.There has to be a lot of discussion to make sure that we do the things we need to do in terms of reform.HSBC Chairman Stephen Green, Standard Chartered CEO Peter Sands and JPMorgan’s international chairman, Jacob Frenkel, also were at the meeting, along with White House economic adviser Larry Summers, U.K. Chancellor of the Exchequer Alistair Darling and French Finance Minister Christine Lagarde. Central bankers at the gathering included Zhu Min, the deputy governor of the People’s Bank of China, Italy’s Mario Draghi, France’s Christian Noyer, Mexico’s Agustin Carstens and Switzerland’s Philipp Hildebrand.

Leaving Behind Rhetoric

It was the first time I’ve seen both sides go beyond the rhetoric,Duncan Niederauer, CEO of New York Stock Exchange owner NYSE Euronext, said after the meeting.There were practical suggestions being discussed. It’s now everyone’s responsibility to produce some tangible results.Terry Smith, CEO of London-based brokerage Tullett Prebon Plc, said one topic was contingent capital, or debt instruments that can convert into equity. I don’t know of any other opportunity that the high-level ministerial and regulatory officials there have to interact with such a broad group of participants from the private sector,Sununu said.There was a very direct, frank exchange because it is a private session.U.S. President Barack Obama’s plans to rein in banks and impose a levy on those with liabilities of more then $50 billion went beyond the blueprint laid out by the Group of 20 nations last year. To avoid a repeat of the worst financial crisis since the Great Depression, G-20 leaders said banks should tie bonuses to long-term performance and increase the quantity and quality of capital they hold.

Trading Restrictions

Financiers, surprised by Obama’s embrace of a plan to restrict proprietary trading and investing at banks, have argued in Davos that such efforts undermine global cooperation and could jeopardize economic recovery. Officials, including Darling and U.S. Representative Barney Frank, who chairs the House Financial Services Committee, countered that banks shouldn’t argue against reforms. The big banks, if they think they’re in a position to stop the regulation, they’re deluding themselves,Frank said yesterday.They have no political support.Today, Frank said banks got the message on the need for more regulation. He said there was general agreement on the need for global coordination. A large part of the discussion was with other regulators about how we can coordinate,Frank said after the meeting. After that, Frank left to meet with Turner from the U.K.’s Financial Services Authority. To contact the reporter on this story: Jana Randow in Davos at jrandow@bloomberg.netAaron Kirchfeld in Davos at akirchfeld@bloomberg.net

Zhu Says China to Keep Yuan Policy, Fight Inflation (Update1) By Simon Kennedy and Rob Delaney

Jan. 30 (Bloomberg) -- People’s Bank of China Deputy Governor Zhu Min said his government’s main goal is capping inflation and signaled officials have no immediate plans to change their currency or monetary policies. The first challenge is inflation expectations,said Zhu in Davos, Switzerland, where he is attending the annual meeting of the World Economic Forum. We’ll continue with current accommodative fiscal and monetary policy,and added that a stable yuan has helped China during the financial crisis. China grew faster than economists anticipated in the fourth quarter, and the inflation rate accelerated to a 13-month high of 1.9 percent in December. The speed of those expansions is putting officials under pressure to consider tightening policy or allowing the yuan to gain. Zhu said overcapacity also poses challenges for the government, which is continuing efforts to rebalance the economy toward domestic consumption and away from export-led growth. Overcapacity in steel, cement and shipbuilding should be reined in, he said.

China wants to ensure the growth path is stable all the year along,between 8 percent and 9 percent, Zhu said. The Chinese economy expanded 10.7 percent during the last quarter of 2009 from a year earlier, the fastest pace since 2007, buoyed by new loans. The International Monetary Fund forecasts China’s growth will accelerate this year to 10 percent from 8.7 percent in 2009.

Davos Demands

China is poised to overtake Japan this year to become the second-largest economy after the U.S. China’s GDP was 33.5 trillion yuan last year, the statistics bureau said Jan. 21, almost the same as the World Bank’s 2008 estimate for Japan.

Billionaire investor George Soros and U.S. Representative Barney Frank were among Davos delegates that urged China this week to allow its currency to strengthen. The world’s fastest- growing major economy has controlled the yuan since July 2008 after it strengthened 21 percent against the dollar over the previous three years. Zhu said stability is important for China’s economy and that a stable exchange rate during a crisis is good for China and good for world.He argued any change would only play a small part in rebalancing the world economy although China is willing to work with other nations in withdrawing emergency stimulus. You change exchange rates, you don’t necessarily change the trade balance,he said. Controlling inflation expectations will be very important in 2010 and money and loan growth is very strong,he said.

Chinese regulators began restricting new loans after a surge in bank lending since Jan. 1 and an unprecedented credit growth of 9.59 trillion yuan ($1.4 trillion) in 2009 fanned concerns of a property bubble. To contact the reporter on this story: Simon Kennedy in Davos at skennedy4@bloomberg.net; Rob Delaney in Davos at robdelaney@bloomberg.net

Emerging Markets Will Drive M&A This Year, Bankers in Davos Say By Jacqueline Simmons

Jan. 30 (Bloomberg) -- Companies based in emerging markets will probably drive global mergers and acquisitions, as countries such as Brazil, India and China fuel economic growth, said bankers meeting this week in Davos, Switzerland. There will be a lot of corporate finance and M&A coming out of emerging markets,said Sadeq Sayeed, Nomura Holdings Inc.’s European chief, at the annual meeting of the World Economic Forum. Capital and savings ratios in Asia are so great, and to grow there is a need for countries like India to have Western-style governance and accountancy, and that means there will be more acquisitions.While takeovers in regions including Asia, eastern Europe and South America have declined by 17 percent to $743 billion over the past 12 months, the drop wasn’t nearly as steep as in Europe and North America, according to data compiled by Bloomberg. Those regions had a combined decline of 34 percent. Near-term secular growth doesn’t exist in the developed economies, so more of the activity, both target and acquirer, will likely occur in Brazil, Russia, India and China, said Peter Weinberg, a founding partner of New York-based investment bank Perella Weinberg Partners LP. BP Plc, based in London, is interested in acquiring assets in Brazil and is working with China Petrochemical Corp. to expand in Asia, Chief Executive Officer Tony Hayward said yesterday in Davos. Carlyle Group co-founder David Rubenstein on Jan. 27 said emerging markets are the best place to invest as their economies grow faster than the developed world.

Attractive Places

Emerging markets are the most attractive places to invest and are rebounding more rapidly,Rubenstein said, referring to China, India and Brazil, South Korea and Turkey.We’ll see lots of capital going into these countries.The International Monetary Fund this week said the global economy this year will be stronger than it previously forecast, driven by emerging markets. Emerging and developing economies will grow 6 percent this year, almost triple the 2.1 percent pace forecast for advanced economies, the IMF predicted Jan. 26. Companies have disclosed an increase in transactions of about 22 percent over the past two months as firms revive deals that were shelved or postponed during the credit crunch. People found in the go-go years they were able to run debt-equity ratios that were higher and those gave rise to the ability to buy things and run conglomerates,said Sayeed.That may not make sense anymore and conglomerates may break down.Weinberg said a reasonable number of large, conservatively capitalized companies are eyeing both domestic and cross-border opportunities. To the extent that the confidence in the recovery doesn’t decline, I think that we will see these large entities capitalize on their strength to create value in this marketplace,he said.To contact the reporter on this story: Jacqueline Simmons in Davos, Switzerland at jackiem@bloomberg.net

Roubini Calls U.S. Growth Dismal and Poor, Predicts Slowing
By Simon Kennedy and Erik Schatzker

Jan. 30 (Bloomberg) -- New York University Professor Nouriel Roubini, who anticipated the financial crisis, called the fourth quarter surge in U.S. economic growth very dismal and poor because it relied on temporary factors. Roubini said more than half of the 5.7 percent expansion reported yesterday by the government was related to a replenishing of inventories and that consumption depended on monetary and fiscal stimulus. As these forces ebb, growth will slow to just 1.5 percent in the second half of 2010, he said. The headline number will look large and big, but actually when you dissect it, it’s very dismal and poor, Roubini told Bloomberg Television in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland.I think we are in trouble.Roubini said while the world’s largest economy won’t relapse into recession, unemployment will rise from the current 10 percent, posing social and political challenges. It’s going to feel like a recession even if technically we’re not going to be in a recession, he said. To contact the reporter on this story: Simon Kennedy in Davos at skennedy4@bloomberg.net

In Davos, Regulators Tell Bankers New Rules Coming
Published: Saturday, 30 Jan 2010 | 8:23 AM ET CNBC.com

DAVOS, Switzerland - 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, U.S. 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 U.S. 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, 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.

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.On the government side, those at the meeting included Lawrence H. Summers, Obama's top economic adviser, British treasury chief Alistair Darling, French Finance Minister Christine Lagarde and Jean-Claude Trichet, president of the European Central Bank, which oversees the 16-nation euro zone. Bankers attending the private talks included Josef Ackermann, chief executive of Deutsche Bank AG, Bank of America Corp. CEO Brian Moynihan and JPMorgan Chase & Co. Chairman Jacob Frenkel. It was the most constructive dialogue I've seen between policymakers and industry officials and hopefully that's a base people can build from,said Duncan Niederauer, CEO of stock exchange operator NYSE Euronext Inc.It was the first time I've seen both sides go beyond the rhetoric. There were practical suggestions being discussed.The banks were asked for their input, Frank said, adding that he believed they got the message that tighter controls were coming. Frankly it doesn't matter if they did or didn't, Frank said.They aren't in charge of this.Frank said the most important element of the meeting was coordinating and better understanding the various approaches that governments are taking to stabilize and prevent excessive risks in their financial industries. The aim was not to push for a global financial governing system, Frank said, saying each country could deal with the crisis on its own terms. A large part of the discussion was on the regulators, to talk about how we can coordinate so we don't create opportunities for (banks) to move from one place to another to escape regulation,he said, adding that some of the strongest concerns over U.S. developments have come from international regulators.

Frank earlier told The Associated Press that some countries got used to the U.S. being the least regulated and they almost resent the fact we are going ahead with regulations, that we are taking the lead.He declined to say which national regulators he was referring to. No one at the Saturday meeting elaborated on any concrete proposals or agreements that were discussed. The head of Britain's Financial Services Authority said the banks didn't ask for anything at the talks. It was not a negotiation or a debate,Adair Turner said. Frank and Turner later held one-on-one discussions. Ackermann of Deutsche Bank called it an excellent, useful meeting, while Joaquin Almunia, the European Union's competition commissioner, said it was not the place to make decisions.It was constructive. Not conclusive, but constructive,Almunia said.

Moynihan of Bank of America and Frenkel of JPMorgan Chase declined to comment.
Dominique Strauss-Kahn, the International Monetary Fund chief, said financial sector reforms should be bold but handled in close cooperation so that no countries suffer as a result. My fear is that we may ... forget one of the key lessons of the crisis, which is coordination,he said at a separate panel after the meeting ended.

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WORLDS BIGGEST DEBTORS
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BERNANKE BACKERS AT DAVOS
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http://www.cnbc.com/id/35141895
UN Climate Chief : Climate Crisis An Economic Agenda Friday, 29 Jan 2010 | 1:28 PM ET By: April Lee Special to CNBC.com

The UN's top environmental official Friday stressed the climate change crisis as a key component of economic recovery that needs rebranding as an economic issue.Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change, called climate change an economic agenda rather than a green agenda. It needs to be explained more clearly that this is about energy security and jobs going in a different direction.Pointing to President Obama’s economic recovery package, De Boer suggested that climate change might be hindering debate and thus the issue could be raised more anonymously.De Boer made the comments in a CNBC interview at the World Economic Forum's annual meeting Friday in Davos, Switzerland. The UN official addressed skeptics of climate change in the audience by noting that 120 heads of state of government decided to come to Copenhagen because they think climate is important.The recently completed UN climate conference in Copenhagen ended with broad policy agreement on reducing carbon emissions, but fewer-than-expected tangible goals.De Boer acknowledged that one impediment to more progress in Copenhagen was that developing countries were afraid that targets were being imposed on them, which would slow down their economic growth and the eradication of poverty.

Climate change was a relatively low-profile issue in Davos this year after being a centerpiece item in 2009.In order reach a political consensus and a subsequent legal agreement, De Boer maintained the importance of rebuilding trust in the program and making the case more clearly that this is actually about growth, not about slowing growth down.