Davos Diary, Day 2: Another Day, More Bad News from the Banking Industry
Guest Blog Entry: by Ashok Vemuri, InfoSys
The mood continues to be very muted here at the WEF in Switzerland, with faces just as long as the coats that block out the bitter cold. While the parameters for the discussion were set yesterday, there is still no one who has set out an agenda or call to action that everyone can rally around to try and find a way out of the current economic quagmire. There are some themes starting to emerge, but everyone is still focused on the problems rather than the solutions.One of the big clouds hanging over at the World Economic Forum in Davos is the fear that we may yet see more bad news from the world's banks. Accounting methodologies and balance sheet information are still not adequate, and everyone fears that there is more bad news lurking around the corner. When this may come, no one is quite sure, but there's a real sense of anxiety.
The West is already in bad shape, and current predictions are that a further 50 million jobs may be lost in the developed world over the next couple of years. This creates an odd role reversal where the East is suddenly worried about Western labor policies, and not vice versa. The ugly specter of protectionism is being raised as Western countries try to maintain jobs and industry at home, something that was warned against in Prime Minister Vladimir Putin's keynote on Wednesday.
As a result, regulators continue to take centre stage ahead of big business, and collaboration is the key theme. It's not enough for individual nations to carry out their own initiatives, such as the bank bailout programs. There needs to be a concerted, joint effort, not only to stimulate jobs at home, but maintain sustained growth in the developing world which will boost the West.
In addition to collaboration, there was a strong theme running through today's discussions that we need to go back to basics. The world has over-complicated itself; we need to scale back and slow everything down so that the world can be stabilized again. This isn't just for the banking industry, but also organizational management, and the relationship between the state and the private sector.
However, it hasn't been all doom and gloom. There have been some bright points too. I'll save those for a round up on Monday so that we can leave Davos on a high note and with a sense of optimism about our ability to tackle a very challenging international situation.
Ashok Vemuri is SVP and global head of banking and capital markets for InfoSys Technologies. He is blogging about his experiences and the role of technology in the financial markets throughout the World Economic Forum. This is his third time attending the WEF in Davos. This is his second blog entry for Davos 2009.The mood continues to be very muted her at the WEF here in Switzerland, with faces just as long as the coats that block out the bitter cold. While the parameters for the discussion were set yesterday, there is still no one who has set out an agenda or call to action that everyone can rally around to try and find a way out of the current economic quagmire. There are some themes starting to emerge, but everyone is still focused on the problems rather than the solutions. Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio