What has changed this year?

Well, in terms of Davos, I’d like to say that from the financial perspective, we were hearing more constructive things from the financial services industry. I’d like to say that but I don’t say that. I have not seen the kind of change, heard of the kind of change that I would have expected. I still see denial, I see people unable to move from their previous positions. I don’t see understanding on the part of a lot of the financial services sector, and I suppose in particular, I failed to see the alignment of understanding in the financial sector with the public view. And that is the critical point. Public opinion has moved on in 12 months, and the financial services sector needs to move on as well and respond. We are seeing it at a political level, but not at an industry level. So that’s a big point for me which so far is disappointing. We’ve heard some very strong statements from politicians who’ve been here; Sarkozy continuing a theme that we have seen from Obama and we’ve seen echoed in the U.K. Those are leading statements and I would have hoped we received a more positive response from the industry and from regulators.

What would it take for the financial services industry to do what they have to?

It’s a matter of understanding firstly the political environment operating and the public levels of concern. There is genuine anger about what has happened and it’s no good assuming that business can continue as usual. They need to understand that this will convert into political action, then convert into regulatory action which will be limiting on business. Because there will be a great nervousness in the next few years about risk and that is going to be more costly in terms of capital. It’s going to be more restrictive in terms of types of activities. My hope is that the industry will see the sense in leading the change, not waiting to have it delivered to them but thinking constructively about the matters that are concerning the public and therefore the politicians. I think changes will come about in terms of size of businesses that will happen. President Obama has talked about it; others are now talking about it. In the U.K. it’s been spoken about. Separating commercial banks from propriety trading. I can see the cost of capital increasing because any regulator anywhere is going to say, “I’m not willing to rely upon money that might be offshore and unavailable to me if something goes wrong. I want the money here in my own backyard.” We’re already seeing this. These will be pretty critical changes and should encourage the industry to proactively meet the political agenda.

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