Government regulators from the United States and Europe laid out their financial reform plans Saturday before a skeptical banking industry, asking financiers for input but adamant that change was coming with or without their support.
Emerging from the two-hour meeting as its unofficial spokesman, U.S. Representative Barney Frank made it clear that governments were now calling the shots after spending billions to bail out the industry.
Top bankers, by contrast, who came into this week's World Economic Forum buoyed by signs of economic recovery, left somewhat subdued even as they called the closed-door meeting constructive.
"No one got up and said, 'Don't regulate us,"' said Frank, a Massachusetts Democrat who heads the U.S. House Financial Services Committee. "It would have been a waste of their time if they did."
The meeting comes after days of tension at this Swiss Alpine resort over government plans for stricter controls on the financial industry to limit speculation and avoid a repeat of the 2008 meltdown that plunged the world into recession. Bankers have protested, saying the U.S. and other countries risk choking off a gradual economic recovery with regulation they see as heavy-handed.
The event was not on the forum's official agenda, but quickly became the most significant development of the day.
"We are determined to do strong, sensible regulation," Frank said, rejecting any notion that President Barack Obama's administration could sink the economy again with too many new controls on the banking industry.
"That's nonsense," Frank told reporters. "What we're trying globally to recover from is a total lack of regulation."
On the government side, those at the meeting included Lawrence H. Summers, Mr. Obama's top economic adviser, British treasury chief Alistair Darling, French Finance Minister Christine Lagarde and Jean-Claude Trichet, president of the European Central Bank, which oversees the 16-nation euro zone.
Bankers attending the private talks included Josef Ackermann, chief executive of Deutsche Bank AG, Bank of America Corp. CEO Brian Moynihan and JPMorgan Chase & Co. Chairman Jacob Frenkel.
"It was the most constructive dialogue I've seen between policymakers and industry officials and hopefully that's a base people can build from," said Duncan Niederauer, CEO of stock exchange operator NYSE Euronext Inc. "It was the first time I've seen both sides go beyond the rhetoric. There were practical suggestions being discussed."
The banks were asked for their input, Frank said, adding that he believed they got the message that tighter controls were coming.
"Frankly it doesn't matter if they did or didn't," Frank said. "They aren't in charge of this."
Frank said the most important element of the meeting was coordinating and better understanding the various approaches that governments are taking to stabilize and prevent excessive risks in their financial industries.
The aim was not to push for a global financial governing system, Frank said, saying each country could deal with the crisis on its own terms.
"A large part of the discussion was on the regulators, to talk about how we can coordinate so we don't create opportunities for (banks) to move from one place to another to escape regulation," he said, adding that some of the strongest concerns over U.S. developments have come from international regulators.
Frank earlier told The Associated Press that some countries "got used to the U.S. being the least regulated and they almost resent the fact we are going ahead with regulations, that we are taking the lead." He declined to say which national regulators he was referring to.
No one at the Saturday meeting elaborated on any concrete proposals or agreements that were discussed. The head of Britain's Financial Services Authority said the banks didn't ask for anything at the talks. "It was not a negotiation or a debate," Adair Turner said.
Frank and Turner later held one-on-one discussions.
Ackermann of Deutsche Bank called it an "excellent, useful" meeting, while Joaquin Almunia, the European Union's competition commissioner, said it "was not the place to make decisions."
"It was constructive. Not conclusive, but constructive," Almunia said.
Moynihan of Bank of America and Frenkel of JPMorgan Chase declined to comment.
Dominique Strauss-Kahn, the International Monetary Fund chief, said financial sector reforms should be bold but handled in close cooperation so that no countries suffer as a result.
"My fear is that we may ... forget one of the key lessons of the crisis, which is coordination," he said at a separate panel after the meeting ended.
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World Economic Forum, Davos, Switzerland (01.27-31)
By Associated Press Writers Bradley S. Klapper and Angela Charlton; AP Business Writer Matt Moore contributed to this report