AL business leaders yesterday warned Western governments that a populist crackdown on the financial industry could crimp a fragile recovery from the worst recession since the 1930s.
The worried response to US 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.
Surveys produced for the conference showed global economic confidence on the rise after deep gloom in 2009 and a cautious return to hiring, especially in emerging markets. But the spectre of uncoordinated, heavy-handed regulation and government intervention in the economy was the biggest cloud on many business leaders’ horizon. Uncertainties over whether China will rein in its feverish pace of growth and concerns about how Greece will tackle its debt crisis also weighed.
US economist Nouriel Roubini, who had warned that the 2008 financial crisis was coming, said loose US monetary policy was now fuelling asset price bubbles that would cause the next bust. “It’s become too much, too fast, too soon and US monetary policy is being exported to the rest of the world,” Roubini told a forum session.
In contrast to many speakers, he said he was not concerned about over-regulation but about a return to business as usual.