On May 10th 2012, the second edition of Bellwether Europe took place to draw industry leaders into debate, discussion and reflection on the future of global capital markets.
There is a wall of doom and gloom that surrounds any discussion on European economies and capital markets today: Banking failure, liquidity freezes, negative growth and sovereign debt crisis – day after day of doomsday scenarios on the demise of the markets. The mood at Bellwether Europe was not much different.
"NO ALTERNATIVE TO REFORM POLICIES": Opening the event was Axel Weber, now executive chairman of UBS and formerly of the Bundesbank and ECB. He argued that there was no alternative to reform policies in order to improve the growth rate of Europe.
"AUSTERITY POLICIES ARE NOT WORKING": Later in the day, Alastair Darling, the former British chancellor, argued that European austerity policies were not working and were leading, as Greece shows, to the scope for a bigger crisis as creditors' demands came face to face with the problem of electoral legitimacy. Mr Darling recognised the potential for inflation to be a problem, thanks to the response to the crisis, but not for several years. Given this uncertain outlook, neither the corporate executives nor the private equity investor (Pierre Sarkozy of Carlyle) speaking alongside Alastair Darling, showed much enthusiasm for investing in Europe.
"TREASURY BONDS ARE NOT RISK-FREE": Jerome Booth of Ashmore gave an entertaining talk and claimed that it was ridiculous to regard Treasury bonds or gilts as "risk-free". Nothing is truly risk-free, he said, so it's all about the balance between risk and return.
Delivering over 150 borrowers and investors, Bellwether Europe was the place to debate the future of Capital Markets but sadly the future to those at the heart of the industry is still looking bleak.
- Basel: How do we achieve financial stability and economic prosperity?
- Where will the market create emerging avenues of finance?
- How can Europe benefit from south-south trade flows?
- What role will corporate funds play in the future of capital markets?
- EURO MARK 2: Looking for signs of life
- Re-examining the investors' safe havens
- How should bankers redeem themselves in the eyes of the public?