DAVOS, Switzerland (AP) — Leading bankers at the World Economic Forum in Davos, Switzerland, are on the defensive amid demands to regulate their industry more closely following the financial crisis that battered the global economy.
Bankers have been widely blamed for the financial crisis that has dramatically reduced the living standards of many in the world, whether they're in work or not.
"We're doing the right thing," Jamie Dimon, chairman and CEO of JP Morgan Chase & Co., said Wednesday.
Dimon, who last week took a 50 percent cut in pay for last year following a multibillion dollar trading loss in London, stressed the key role of banks in making the economy work, and insisted many of the bad practices of the recent past were being phased out.
Regulators, he said, were "trying to do too much, too fast."
Banks have spent much of the past few years in a bunker, getting on with shoring up their tarnished finances — and that's spelled difficulties for many in need to get their hands on money they need. Given its importance to the global economy, many reforms have been called for to make them work better for society as a whole. One solution being espoused around the world is to siphon off risky trading activities from traditional banking such as taking deposits and granting loans.
Bankers have borne a large chunk of the blame — many say the lion's share — for the fragile state of the global economy.
The financial crisis, which bared its teeth in the summer of 2007, started when banks effectively admitted they didn't have a full understanding of many of the investments they had been making. Notably, they took heavy losses in the U.S. on complex investments based on mortgages to people with shaky credit. Just over a year later, Wall Street luminary Lehman Brothers had collapsed, among others.
Though the world economy is growing after its deepest recession since World War II, the fallout from the crisis remains. A United Nations body said Tuesday that the number of unemployed around the world will rise to a record 202 million this year, while many countries, particularly in Europe, struggle to post any growth at all.
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