Not even the harshest critic of the World Economic Forum could dismiss this iteration of its annual meeting at Davos as about only incremental change. Rethink,Redesign,Rebuild, goes its official theme,and the atmospherics of the meeting are certainly resolutely reformist. While,as always,a sometimes quirky cross-section of human endeavour and thought will be on display,there is a clear main attraction this time: the question of whether,and how,to push the long-delayed reform of the architecture and regulation of finance. And bankers will be on the back foot,especially following US President Barack Obamas populist broadside at them last week. The changed mood is reflected in the planned composition of many of the panels: discussions on financial markets which previously featured executives from banks and hedge funds now feature regulators and academics who have advised governments. And the opening speaker is Nicolas Sarkozy,the president of France,a man who is not known for shyness about the role of the state in stabilising finance. And it isnt just about the continuing attempt to impose some multilateral and trans-national order on financial flows. No,thinking about reform of finance at the national level is what is most likely to benefit from the sort of free exchange of ideas and best practices for which Davos is known. Thats where the bankers will hope to make a stand: in the middle of bonus season,the heads of Citibank,HSBC,the Bank of America,and Deutsche Bank will stand up and try and make a passionate defence of both their compensation methods and what they will say is their right to grow unfettered by state control or concerns that they will become too big to fail. There is much that Indias 100-strong official contingent could learn. Sadly,however,it will have little to teach in turn. A focus on financial sector reform will tragically leave India on the sidelines; after all,there is in this country hardly a financial sector worthy of being called so,leave alone one the rest of the world can learn from. India is but starting down a path; a disagreement in the far distance on which turn that path should take is not a discussion to which we can profitably contribute. So a shallow reading that more regulation equals more security would be disastrous for Indias growth dreams. We need to listen to the debate,and learn from it,as we prepare to deepen and grow Indias finance.
