A New World Financial Order
February 1, 2010 10:34 AM
The world's foremost annual international gathering of government and financial services leaders finished a five-day meeting in Switzerland on January 30. There was almost universal agreement among world political leaders attending the World Economic Forum that the root cause of a near global economic crash was irresponsible risk taking by bankers all over the world. French President Nicolas Sarkozy summed up the sentiments of both government leaders and voters world-wide in calling for a return to ethics and morality in the financial services sector. Some bankers in attendance agreed. "The banks who stayed strong are angry at the banks who had poor management," said Robert Diamond, President of Barclays, a large British bank. Just as happened in the last 100 international financial crises, financial services firms have managed to socialize the losses by passing them on to taxpayers while retaining their profits, according to the World Bank. This moral hazard must be stopped through unified international regulation, and financial services sector leaders must relearn that the purpose for their sectors' existence is to efficiently provide credit for the real world. In our increasingly integrated world economy. New regulations that will force senior financial services executives who caused the problem to recognize their fiduciary responsibility to their stockholders and moral and ethical responsibility to society should be coordinated internationally to provide consistency.
