DAVOS (AP) — Billionaire financier George Soros said Wednesday that President Barack Obama’s call for tough regulations on big banks is too soon because the economy is not “out of the woods.”
Soros said that imposing new taxes on banks goes against the policy the US government is pursuing, which is to do “everything to help them earn their way out of a hole.”
He told a luncheon on the sidelines of the World Economic Forum that he is “very supportive” of Obama’s plan to curb the size of banks, but the timing is wrong and he doesn’t think it goes far enough.
The huge amounts of credit that the US government poured into the banks has stabilized the markets, Soros said. “The concerted international stimulus got the world economy going again” and the banks are paying back their bailouts “at a really remarkable rapidity.”
“But the way the rescue was organized, I’m afraid, created a lot of political resentment because instead of injecting capital into the banks at the equity level, the decision was made that this would be somehow politically unacceptable,” he said.
French President Nicolas Sarkozy called for tighter banking regulation at the World Economic Forum on Wednesday, telling the room full of international bankers and CEOs just what they didn’t want to hear: Brace for bonus curbs and new bookkeeping rules.
It was a brazen posture for the World Economic Forum, echoing rallying cries of workers from the US to Europe and Asia. Many in the crowd – including those whose companies are starting to recover after a crushing year – bristled at Sarkozy’s keynote speech, calling it simplistic and populist.