Major global banks split on regulation battle
By Lisa Jucca and Martin Howell
DAVOS, Switzerland (Reuters) - The world's top financiers are at odds about how to fight back against a global push for tougher financial regulation, with commercial and investment banks struggling to reach common ground.
Top executives from Wall Street and Europe's leading banks have been holding behind-the-scenes talks at the World Economic Forum in the Swiss ski resort of Davos, sources close to the negotiations said, but a deal has proved elusive.
Wall Street's largest and some major European investment banks argued in favor of a tough common front against politicians who are calling for much tougher measures to regulate the industry in the wake of the financial crisis.
But they did not manage to win over the heads of some commercial banks who believe the industry needs to be more conciliatory, the sources with knowledge of the talks said.
"The tough line of the large investment banks is very different than the approach of the major commercial banks," said one of the sources on Friday. "It looks like it is very difficult to reach a common position."
The banks held the discussions ahead of an expected meeting with regulators and lawmakers on Saturday.
"What we are trying to achieve is to engage in a good dialogue with all the relevant parties, the regulators and the political side," said Brian Moynihan, the CEO of Bank of America Corp. (BAC.N: Quote), who confirmed the bankers' meeting took place.
U.S. President Barack Obama jolted markets on January 21 with proposals to force commercial banks to cut ties with hedge funds and private equity funds and to stop proprietary trading for their own profit. Obama has also said he wanted the financial sector to pay for a massive taxpayer bailout. Continued...