| PARIS, June 27
PARIS, June 27 The plush backdrop of the Westin
Vendome hotel in Paris had champagne on ice on the bar
throughout this week's Institute of International Finance (IIF)
conference but no bankers were spotted popping the corks.
Five years after the financial crisis and more than three
years after Greece heralded a new threat to Europe's long-term
prospects, the woes of the euro zone continue to weigh heavily
on banking sector leaders.
News late on Wednesday that EU politicians agreed a plan to
force bondholders to take losses at failing banks came too late
to lift the gloom. It also robbed the event of its main speaker,
with French Finance Minister Pierre Moscovici whisked away to
Brussels to discuss the deal.
"The mood is no different this year to last year. That's
noticeably different to the U.S.," said one American attendee at
the event. "Over here you don't get that sense (of improvement)
The closing dinner for more than 400 people was staged at La
Salle Wagram - an impressive theater in Paris' 17th
arrondissement less than 100 meters from the Arc de Triomphe
with a lengthy red carpet for delegates to walk down.
But the lavish touches of opera and cannon fire that marked
last year's event in Hamlet's castle near Copenhagen, or an even
grander banquet in Beijing four years ago, were missing - some
reflection, perhaps, that organisers were seeking to be more in
tune with the recessionary times.
With excess out, the focus for the group's more than 450
members from the financial industry was on what it dubs the
three Rs - regulation, reputation, and risk - and the chance to
rub shoulders with politicians, regulators and investors.
Jean Claude Trichet, gradually returning to public life 18
months after ending a tough stint as European Central Bank
President, made two speeches (his own, and one to fill in for
the missing Moscovici) and could be heard telling jokes on the
sidelines among groups of delegates.
Bank bosses called for more clarity on what the regulatory
landscape will look in five years, saying many complex issues
that will affect their shape and size are still unresolved.
The European public still believes banks have more to do to
make up for the chaos and economic pain caused by the 2008
crisis, but the sector's leaders warn overregulating may just
stall recovery further.
"The number one issue for most of is what are the regulatory
rules of the game," said Rick Waugh, CEO of Canada's Scotiabank
Bosses who met behind the scenes were at least optimistic
things had improved, Waugh said. "Last year we were talking
about whether the euro would survive. There are still issues in
Europe, but we're not talking about survival."
Concerns at how central banks will unwind their quantitative
easing and worries of a slowdown in China cast a pall, but they
did little to knock the conviction that a three speed economy is
underway: Europe is in the slow lane, the United States has
revved up its engine and making progress, while Asia has hit
some bumps but is still cruising.
When ECB member Jorg Asmussen said the central bank had no
need to put its foot on the brake nor press the accelerator, UBS
Chairman and former Bundesbank chief Axel Weber said
the problem was Europe was not driving a car, but had a big bus
with 17 passengers.
"What you really pick up is the realisation that America is
recovering and its financial sector at the top is in relatively
good shape," said Gerard Lyons, a former economist at Standard
Chartered and now advisor to London's mayor.
"Slowly the penny is dropping here that Europe needs to get
a move on."
Public relations firm Edelman laid out for bankers the
redemption task they face. Financial services have ranked bottom
in terms of trust across business sectors in its surveys of
consumers in each of the last two years, with banks' performance
and perceived behaviour both faring poorly.
The IIF said it is committed to being lean to reflect the
times its members lived in, and is keen for more non-financial
members, such as newcomer Spanish power firm Iberdrola.
Yet it remains firmly a bankers' forum - with occasional
diversions into insurance and asset management - and most of the
focus on harmonising or simplifying regulation is preaching to
the converted, one delegate said.
"If someone here said big banks should be broken up then
they may as well go and stand in the corner," she said.