Prospects for peace in Syria
World powers are gathering in Switzerland in an attempt to find a diplomatic solution to Syria’s three-year civil war, which has cost more than 130,000 lives drawn in regional powers to fight a proxy sectarian war. The conference nearly fell apart before it began when the UN invited Iran to participate. But what chance of success remains? Roula Khalaf, foreign editor, and Borzou Daragahi, Middle East correspondent, join Ben Hall to discuss.
Having heard prime minister Shinzo Abe twice already today I can only concur with Gideon Rachman’s assessment that he does not seem to regard conflict with China as unthinkable.
Maybe, that is realistic and maybe such realism will protect the world from such a calamity. But it frightens the wits out of me. I was particularly struck by the almost casual way in which Mr Abe cited the World War I precedent. I wish the US would step more decisively on this nonsense.
I asked a question about the “third arrow” of Abenomics, which is structural reform. In this I indicated profound scepticism about the chances that this programme could generate sustainable growth of 2 per cent a year in an advanced economy with a shrinking labour force. This would imply labour productivity growth of 2.5 per cent a year – far faster than in any big high-income country since 2000. This is not inconceivable, since Japan’s labour productivity in services is relatively low. But it is a big stretch and would require large social and economic changes. Read more
(c) World Economic Forum
By Martin Arnold, Banking Editor
Two of the world’s most senior bankers sought to rebuff the charges of their critics by arguing the industry had become safer since the financial crisis thanks to higher capital levels, lower leverage, reformed pay structures and a tougher regulatory scrutiny.
Douglas Flint, chairman of HSBC, said of the financial crisis: “Nobody in that room [the HSBC boardroom] ever wants to take the risk of ever being in that situation again.”
Speaking on a panel at the World Economic Forum in Davos, he added that the HSBC board was spending half to two-thirds of its time “dealing with the aftermath of the crisis”.
Antony Jenkins, chief executive of Barclays, said: “Where the system failed and where institutions failed within that was where they mis-priced risk.” Arguing that banks had increased the levels of capital they held and reduced their leverage, he added that “changes
in conduct” had also reduced the chances of the 2008 crisis being repeated. Read more
FT editor Lionel Barber reports on a positive mood on the first day of the World Economic Forum in Davos, and says the big talking points will be China, growth and political deadlock in the US, and optimism over Africa.
James Gorman, the chief executive of Morgan Stanley, neatly summarised his view of US authorities’ so-called “princeling” probe, into whether rival bank JPMorgan sought to win deals in China by hiring the sons and daughters of the country’s elite.
“There are a lot of talented people that come from those families,” Mr Gorman told CNBC, in a television interview on the sidelines of the World Economic Forum in Davos, Switzerland. Full story on FastFT
(c) Getty Images
Here at Davos, I’ve just had the opportunity to moderate a discussion between the Japanese prime minister, Shinzo Abe, and a group of international journalists. I asked Mr Abe whether a war between China and Japan was “conceivable”.
Interestingly, he did not take the chance to say that any such conflict was out of the question. In fact, Mr Abe explicitly compared the tensions between China and Japan now to the rivalry between Britain and Germany in the years before the first world war, remarking that it was a “similar situation”.
The comparison, he explained, lies in the fact that Britain and Germany – like China and Japan – had a strong trading relationship. But in 1914, this had not prevented strategic tensions leading to the outbreak of conflict.
Naturally enough, Mr Abe also made it clear that he would regard any “inadvertent” conflict as a disaster – and he repeated his call for the opening of a military-to-military communication channel between China and Japan. Read more
By John Gapper
An efficient and functioning internet can boost GDP, partly by enabling small and medium-sized companies to sell and source raw materials more widely, according to a Boston Consulting Group report unveiled at Davos. Read more
By Gillian Tett
Just in case anyone was starting to feel too relaxed or cheerful about the outlook for the Eurozone, Axel Weber, UBS chairman, delivered a sober slap-down today.
Axel Weber (c) World Economic Forum
In a downbeat session with business leaders and academics about the future of Europe, Weber pointed out that the current pace of growth was not nearly fast enough to really dent unemployment or set the region on a sustainable growth path. And in practical terms, that meant Europe faced at least two risks this year.
One was the danger that European elections could show a growing mood of political protest – and volatility.
Secondly, the ECB’s stress tests could spark new market alarm about the banks – which would impact sovereigns too. Read more
FT senior columnist Gillian Tett reports on why business and governments are at loggerheads over where growth will come from, with business saying it is not ready to invest, yet confidence in governments is low.
Chris Giles, economics editor, finds a mood of optimism among economic experts on the first day of the World Economic Forum in Davos, but concerns remain over the strength of the recovery.