January 29, 2010 / 10:16 AM / 8 years ago

Highlights from Rethinking Government Assistance panel at WEF

DAVOS, Switzerland (Reuters) - Following are highlights from the Rethinking Government Assistance Panel at the World Economic Forum in the Swiss resort of Davos on Friday.

JEAN-CLAUDE TRICHET, PRESIDENT, EUROPEAN CENTRAL BANK

On U.S. authorities saying a strong dollar is in U.S. interest:

“I fully agree.”

”We underestimated, in my opinion, that we were very close to a full-fledged depression...

”The governments put on the table a necessary level of taxpayer risk which was necessary to avoid depression...

”We had a global problem ... we have to find a global solution...

”We are fortunate in this period because we have a consensus ... there is a consensus that global finance appears to be fragile to an extent that was underestimated before...

”If we want to create jobs as soon as possible, we need confidence ... to get confidence you need to have a credible past to get back to normal

”Confidence is of the essence and it is what the central banks are trying to do.

“In the longer term we have so many challenges ... we have also science and technology, moving at a speed which is incredible ... the success of the emerging world.”

DAVID CAMERON, LEADER OF BRITISH CONSERVATIVE PARTY

”It is not so much the quantity of regulation, but the quality...

”Our view is we need to change the regulatory system to end the tripartite system... we think the central bank is the best place to put that authority...

”On the issue of the relationship between society and banks, it does need to change quite fundamentally...

”Two of the things President Obama said we welcome - there are things at the high end of risk, prop trading that should not be...

”As we look to the future some sort of insurance levy, if that can be agreed internationally, would be worthwhile.“ ”On this issue of confidence, it is wrong to say there is a choice for some countries between early deficit reduction and job creation. For some countries there is no such choice.

“There is a great danger that as the crisis points fade, politicians start saying let’s just wait and see ... as economists have been saying, a debt and deficit crisis could replace the leverage crisis.”

ANDERI KOSTIN, CEO, VTB

”The crisis showed unprecedented levels of involvement of the government in the financial sector...

“President Reagan once said the most terrible words are I am from the government and I am here to help, but during the crisis these were words that (the financial sector) was glad to hear... ”Unfortunately, in my opinion, this spirit of cooperation has been lost over the past few months...

”Growing concern in the banking community that the government is not understanding the situation... though, generally, the banking community understands the need to change the system, to change regulatory rules...

”In Russia, we still share a very good understanding (between government and business) on what steps need to be taken. Public opinion is reasonably good on Russian bankers...

”I don’t think there is a strategy either in the U.S., or Europe, or Russia that involves the government keeping large stakes in financial institutions....

”I am quite sure the British government will think sooner or later of how to privatize the assets (they now hold in the sector)

PETER SANDS, CEO, STANDARD CHARTERED

”I think the relationship between banks and society has changed irreversibly...

”It is definitely going to be different to what it was before the crisis...

”I want to focus on the broader issue of the relationship of banks to government and society, including banks that took no help whatsoever, because that has fundamentally changed

”We are in the process of working out how to craft that new relationship...

”There is a common language (from) regulators, central bankers... and increasingly a very constructive dialogue

”The more challenging strand of how banks and bankers craft a new relationship with society is on the political side. There it is much more challenging to see how the path unfolds...

”As an industry we have managed to be tone deaf, shooting ourselves in the foot, insensitive...

”I think on the technical regulatory side there are many tough debates to be had. The primary challenge for both bankers and politicians is to address that broader relationship issue

“The trouble is we cannot craft individual solutions for individual countries.”

Reporting by Davos team

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