South Korea's President Lee Myung-bak on Thursday joined the political onslaught against bank chiefs saying they should not oppose reforms after the international financial crisis. Lee increased the heat on top bankers, who are campaigning against greater regulation at the World Economic Forum (WEF), after France's President Nicolas Sarkozy and billionaire financier George Soros spoke out forcefully for change.
"Bankers should not oppose these new measures," Lee said after a speech to the political and business elite at the Davos forum. "They should instead take the initiative." "We need sensible and healthy changes to the international financial system," Lee said.
Reforms to bank operations proposed by US President Barack Obama and other world leaders have dominated debate at Davos. Lee followed Sarkozy who said globalisation had "skidded out of control" and lashed out at the "indecent" pay in the finance industry.
"President Obama is right when he says that banks must be dissuaded from engaging in proprietary speculation or financing speculative funds," Sarkozy said on Wednesday night. "From the moment we accepted the idea that the market was always right, and that no other opposing factors need be taken into account, globalisation skidded out of control."
Sarkozy said: "There is indecent behaviour that will no longer be tolerated by public opinion in any country in the world. "There are excessive profits that will no longer be accepted because they are without common measure to the capacity to create wealth and jobs. "There are remuneration packages that will no longer be tolerated because they bear no relationship to merit."
Sarkozy said it was "morally indefensible" for people who destroy jobs and wealth to earn a lot of money. Finance legend Soros supported Obama's plan to clamp down on banks but said it was coming too soon and was not strong enough. Many leaders have also warned that the world is not yet safe from a return to recession or a new crisis. But President Lee, whose country is head of the Group of 20 nations this year, said it was time to set "a post crisis agenda".
Lee said South Korea would seek agreement on "a stronger" international early warning system for financial crises and "concrete actions" to reform international financial governance. With some signs that the economic crisis is easing, "it is time for the G20 to set the post-crisis agenda, and to build the platform that will ensure the sustained and balanced growth of the world economy in the months and years ahead," Lee said.
"The recent financial crisis and the economic downturn have increased the pressures for protectionism," added. "We should be on our guard against protectionism. But at the same time, we should be mindful of the side-effects of globalisation that feed the antipathy toward greater global integration."