Lobbying at Davos

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Davos isn’t just a place where the wealthy, influential, and powerful get together to swap ideas. It’s also a place for the heads of business to lobby the most influential policy makers and regulators in a confined atmosphere.

Wall Street Journal:

Bankers and their lobbyists say they’ll be jetting into the Alps armed with long lists of proposed and pending rules that they would like to water down or kill altogether. The lobbying is more likely to take place in private meetings than on stage in full view of hundreds of reporters and television cameras.

Much of the lobbying is likely to revolve around an international accord that bank regulators hammered out last year in another Swiss city, Basel, about 240 kilometers 150 miles northwest of Davos. The so-called Basel III rules will force banks to hold thicker capital cushions to guard against potential losses and deeper pools of liquidity to protect against potentially crippling bank runs.

At a pre-Davos news conference in Paris on Monday, Frédéric Oudéa, chairman and chief executive of giant French bank Société Générale SA, said the industry was hoping to discourage individual countries from imposing requirements that are tougher—or take effect sooner—than the Basel rules.

One item in many banks’ crosshairs: a provision of the Basel accord that calls for regulators to impose higher capital requirements on “systemically important financial institutions.”

Bankers and regulators are haggling over how to define that term. Most banks want the list of such banks to be as small as possible. But the industry also is warning that leveling a capital “surcharge” on one big bank but not another could create an uneven playing field. Some banks are simply trying to kill the proposal.

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