More than once at Davos a quote from Ronald Reagan has been taken in vain.
The quote from the former U.S. president is said to go something like this: “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’”
After getting an audience chuckle, the speakers using the line go on to say that during the height of the financial crisis, bankers and others were for once indeed glad to see the government, riding to the rescue.
At one session today, European Central Bank President Jean-Claude Trichet reminded participants we were very close to a “full-fledged depression,” avoided by government and central bank intervention.
Now the trickier questions revolve around what to do with significant government stakes in finance and industry and the development of a new government-banking compact.
At a session at the World Economic Forum annual meeting here in Davos this morning, Peter Sands, chief executive of Standard Chartered Bank, was among those trying to tackle those questions.
While certainly posing real problems, Sands said he could see a way to the resolution of issues centered on post-crisis reform of bank supervision.
More difficult, he said, were political challenges for banks. He said the relation of banks to government and broader society has “changed irreversibly.”
Sands said bankers have done themselves no favors, acting “tone deaf” to public anger in a post-bailout world. Politicians interested in demonizing bankers haven’t helped, either.
And, Sands said, solutions have to work nationally and globally.