International bankers and government officials met behind closed doors Saturday to discuss proposed financial reforms the industry feels are threatening economic recovery _ and emerged calling the talks useful but inconclusive.
"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, chief executive of stock exchange operator NYSE Euronext Inc.
The more than two-hour meeting, held on the sidelines of the World Economic Forum, reflected deep divisions at the annual event over what effect proposed regulations could have on the nascent economic recovery worldwide.
"It was the first time I've seen both sides go beyond the rhetoric," Niederauer added. "There were practical suggestions being discussed."
The event was not on the forum's official agenda, but quickly became the most significant development of the day.
On the government side, Associated Press reporters saw Lawrence H. Summers, President Barack 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, all enter the room.
Bankers at the meeting included Josef Ackermann, chief executive of Deutsche Bank AG, Bank of America Corp. chief Brian Moynihan and JPMorgan Chase & Co. Chairman Jacob Frenkel.
"We are determined to do strong, sensible regulation," said U.S. Congressman Barney Frank, chairman of the U.S. House Financial Services Committee, said as he went into the talks. "They understand the reality, which is we are going to go ahead with regulation."
Frank rejected any notion that Obama's administration was threatening to choke off growth by putting too many controls on the banking industry too quickly.
Afterward, Frank said he and other government officials explained how they would go forward with reforms. The goal was to coordinate and better understand each other's plans, not to work toward a global regulatory framework, he said.
"A large part of the discussion was on the regulators, to talk about how we can coordinate so we don't create opportunities for them to move from one place to another to escape regulation," Frank said.
The banks were also asked for their input, he said.
"There was no issue of the banks asking us for anything. It was a discussion of a full range of issues organized in breakout groups and discussions. It was not a negotiation or a debate," said Adair Turner, head of Britain's Financial Services Authority.
Frank and Turner later held one-on-one discussions.
The anxiety of financiers about regulatory proposals was reflected in a series of meetings at Davos this week, with bankers and politicians debating how to reform the financial industry without slipping into over-regulation that could prolong the economic crisis. The forum ends Sunday.
None of those at the Saturday meeting elaborated on any concrete proposals or agreements.
Ackermann of Deutsche Bank said it was 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.
Frank said no country was ready to give up its sovereign rights to deal with regulations on its own terms, rejecting the notion of a global financial governing system. He said he believed the bankers 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."