WASHINGTON, D.C. (TheStreet) -- European leaders must move quickly to avoid a global collapse, finance luminaries said Friday at the Bretton Woods conference on Friday.
The conference was one of a series of events held in Washington in recent days around the annual meetings of the International Monetary Fund. Speakers included IMF Managing Director Christine Lagarde,
CEO Vikram Pandit and European Central Bank President Jean-Claude Trichet to name a few.
Ernesto Zedillo, the former Mexican President turned Yale University professor and Citigroup board member, regularly peppered the speakers with questions while legendary fund manager George Soros sat quietly at a table near the stage.
Also among the speakers was Larry Summers, former U.S. Treasury Secretary in the Clinton Administration and until recently a top adviser to President Obama. The Harvard University professor urged increased spending by governments to pull Europe out of crisis.
Summers also stressed that his pessimistic mood was deliberate--an effort to get financial leaders to grasp the urgency of the situation and the importance of acting decisively. However, he added "it's not just about political will. It's also about generalized understanding."
Still, many conference attendees expressed pessimism that Europe's elected officials and top bankers would take the appropriate steps any time soon.
"The people here are the problem," said the CEO of one large company that settles trades between giant global financial institutions. "They're going to wait until their backs are against the wall to do something."
Of course everyone understood that the real decision-making was going on behind closed doors. Nonetheless, the weekend ended without any clear action being taken, a troubling sign given the dire economic outlook expressed by most participants.
"There is growth, but it's low and slowing down," Lagarde told the audience during her speech.
Lagarde also stressed the importance of stimulating a recovery that would have meaning for ordinary people. She also spoke of the "social dimension" that she believes is critical to turnaround plans.
"Growth is not sufficient. Growth with jobs is not sufficient," she said.
Regulatory reform remains a major topic of discussion, as regulators and policymakers work to stave off the next crisis. New York Fed President Bill Dudley argued in a speech that commonly accepted tools to measure risk of bank balance sheets, such as "value at risk," are ineffective.
However, there were also suggestions that regulatory reform might take a back seat to policies intended to keep the European crisis from dragging down the global economy. Citigroup's Pandit argued that regulating banks too strictly would drive risky activities in more loosely-regulated markets.
Adair Turner, chairman of the U.K. Financial Services Authority, acknowledged the quaundry.
"One of the major challenges we face today is how do we build new micro and macro regulations for the future, tools for the future, while also continuing to navigate our way through what are very significant current pressures."
The meetings, however, received more attention for the conflicts they laid bare than the sense that regulators, policymakers and bank heads were acting in concert. Among the biggest news items to come out of the weekend was a clash between
boss Jamie Dimon and Mark Carney, governor of the bank of Canada, reported by the
Monday, in which Dimon repeated an argument he made recently that global capital rules are unfaier to U.S. banks. The enmity was so palpable after the closed door meeting that
CEO Lloyd Blankfein sent an email to Carney to try to smooth things over, the newspaper reported.
Written by Dan Freed in New York
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