Doubt in Davos

The mood in the resort town of Davos, Switzerland is muted this week as business leaders discuss the coming wave of regulation at the World Economic Forum.  The primary concern is that regulatory reform will not be even-handed leading to greater opportunities for regulatory arbitrage.  That concern coupled with increasing political risk in emerging markets such as China is cause for considerable doubt in a quick economic recovery. Here is what The New York Times is reporting this morning.

Global business leaders warned Western governments on Wednesday that a populist crackdown on the financial industry could crimp a fragile recovery from the worst recession since the 1930s. The worried response to U.S. President Barack Obama’s plans to curb big banks and a British assault on bankers’ pay came as 2,500 business leaders and policy makers met at the World Economic Forum in the Swiss ski resort of Davos.

Surveys produced for the annual conference showed global economic confidence on the rise after deep gloom in 2009 and a cautious return to hiring, especially in emerging markets.  But the specter of uncoordinated, heavy-handed regulation and government intervention in the economy was the biggest cloud on many business leaders’ horizon. Uncertainties over whether China will rein in its feverish pace of growth and concerns about how Greece will tackle its debt crisis also weighed. Standard Chartered bank CEO Peter Sands said there was a growing risk that fragmented regulatory initiatives would “create enormous amounts of complexity” and encourage financial companies to arbitrage among regulators.

Is your company ready for the potential regulatory tsunami?  Wheelhouse Advisors can help you prepare.  To learn more, visit www.WheelhouseAdvisors.com.

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About Wheelhouse Advisors
Wheelhouse Advisors LLC is the publisher of The ERM Current™, an online publication and blog dedicated to providing the latest updates on current trends in Enterprise Risk Management & Control. Wheelhouse Advisors provides cost-effective Enterprise Risk Management & Control solutions to both large and mid-size corporations. To learn more about Wheelhouse Advisors, please visit our web site at www.WheelhouseAdvisors.com.

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