DAVOS, Switzerland — If there is one place bankers should be able to let down their guard a little, you would think it would be at the World Economic Forum in Davos, an exclusive gathering of 2,500 of the globe’s financial and corporate elite.
Yet even here, top banking executives are finding themselves on the defensive. It’s a reflection of how big banks — blamed by some politicians and the public for the 2007 financial crisis and the resulting recession — are still grappling with pressure from recent scandals and moves toward increasingly complex regulation.
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From FDR to Senator Elizabeth Warren there has been a struggle to prevent American Capitalism from destroying itself. Part of the initial logic of capitalism was that, the free market, consisting of untold numbers of players, would sort things out in such a way that productivity and wealth would increase. The fewer the players, the more powerful the players, the more the system is stressed. The military-industrial complex that President Eisenhower warned us about has its companions now among the big banks and the hedge funds. Senator Warren said it best…it is time to make banking boring again. Dodd-Frank is imperfect but moves in the right direction.