Dimon Avoiding Davos Limelight After $23 Billion In Fines

Bloomberg

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Davies will moderate a Friday session titled "Rebuilding Trust in Finance" that features Credit Suisse Group AG Chairman Urs Rohner and Guillermo Ortiz, chairman of Grupo Financiero Banorte SAB, Mexico's third-largest bank.

'Best Rules'

"Banks have to think back to basics," Ortiz said in an interview. "They have to make money by servicing clients and not by betting among themselves in markets that have no relation to the economy."

Banks and financial services are the least trusted of all industries, according to an annual global survey by public relations firm Edelman released Jan. 20. Fifty-one percent of those polled said they could trust banks to do what's right, almost unchanged from last year's 50 percent, compared with 79 percent for technology companies. The figure for banks was 32 percent in the U.K. and 33 percent in Germany.

"The best rules won't guarantee that banks are well-led, that banks do what makes them look acceptable to society," Deutsche Bank co-CEO Juergen Fitschen said at a client reception in Berlin on Jan. 15. "These rules have to be accompanied by changes in our institutions."

Fitschen, who's also going to Davos, Jain, Dimon and Rohner declined to comment for this article through their spokesmen.

There are no Western bankers among the co-chairs of this year's annual meeting. The slot held previously by UBS AG Chairman Axel Weber, Dimon and Standard Chartered Plc CEO Peter Sands is being filled by Jiang Jianqing, chairman of Industrial & Commercial Bank of China Ltd. Jiang, 60, is the first Chinese banker to be a co-chairman of the annual meeting.

The World Economic Forum leadership role held by ICBC, the world's most profitable bank, reflects the increasing influence of China's state-controlled banks, which have added more assets since the 2008 crisis than are in the U.S. banking system.

The contrast with European banks, which cut about 3.5 trillion euros of assets and may shrink by an additional 2.6 trillion euros, according to estimates by Royal Bank of Scotland Group Plc analyst Alberto Gallo, is striking.

'So Big'

The European Central Bank is conducting a three-stage review of banks to identify capital deficiencies in their statements of assets, debts and owners' investment, known as the balance sheet, before assuming oversight in November of about 130 lenders in the 18 countries that use the euro. Designed to restore confidence in lenders by breaking the link with their sovereign governments, the exercise may force banks to boost capital and could prompt further deleveraging, ECB President Mario Draghi, said earlier this month.

"The balance sheets are still so big," said Guillaume Rambourg, founder of Paris-based hedge fund Verrazzano Capital SAS. "That's what European banks really haven't addressed, which is the size of the balance sheet, the gearing to their capital base. Everything they can do to accelerate the balance-sheet reduction and increase the capital ratio will be welcomed and rewarded, probably, by the market."

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