The World Economic Forum opened today in the Swiss town of Davos. With this year’s title of "Improve the State of the World: Rethink, Redesign and Rebuild," thousands of politicians and business leaders will meet to redefine the world's banking regulations.
U.S. President Barack Obama's plans to tax and curb big banks jolted markets last week. Obama’s proposals are to force commercial banks to cut ties with hedge funds and private equity funds and stop proprietary trading, and to make the financial sector pay for a massive taxpayer bailout.
Renowned economist Nouriel Roubini, who predicted the financial meltdown and the global recession, told delegates that Obama's plans were the only way to ensure a stable economy.
[Nouriel Roubini, Economist]:
"I think that the proposals of the Obama administration are going finally in the right direction and now people like Trichet and Mervyn King are also supporting those kinds of restrictions. In my view those restrictions are not enough. If financial institutions are too big to fail, they're just too big and they should be broken up.”
Business leaders also welcome Obama's proposal, which they see as a step towards a more healthy U.S. economy.
[Ronald Nicol, Managing Director, Boston Consulting]:
"Well first I think the issue this year is recovering, the economy is recovering. I think the recent comments by Obama are positive in the sense that we're addressing some of the issues around debt, which is not just a U.S. problem but a global problem. And I think that we're going to see changes obviously in the legislation in the U.S., so I think it's very positive."
During the four-day meeting, other topics likely to dominate will be the Haiti earthquake devastation and the future of the global climate movement, following the failure of last month's Copenhagen summit.