Why the Elites Are Losing Sleep

By Rana Foroohar – Now everyone is fretting about how the Fed, the European Central Bank (until recently), the Bank of Japan and even Chinese authorities have distorted the prices of assets from stocks to bonds to real estate, quite possibly laying the foundation for a market crash or, in the longer term, hyperinflation.

“Central bankers can buy time, but they can’t fix the world’s underlying economic problems,” said UBS chairman and former Bundesbank head Axel Weber, who worries that easy money and low interest rates are covering up the fact that most rich countries still need to pay down debt and create a lot more jobs. “We’re buying short-term fixes at the expense of future generations.” more> http://tinyurl.com/caknfwr

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• World Economic Forum: Why the Elite Are Losing Sleep (business.time.com)
• Weber in Davos Joins Dimon to Spotlight Easy Money Danger – Bloomberg (bloomberg.com)
• Germans Reclaim Their Gold From the Fed! (wealthwire.com)
• Weber warns Davos that the banks have a long way to go (independent.ie)
• U.S. delaying debt reckoning – UBS chief (money.cnn.com)
• Carney for BOE Should Give Central Banks a Clue – Bloomberg (bloomberg.com)
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Banks may shrink for good as layoffs near 160,000

By Sarah White – A Reuters analysis of job cuts announced by 29 major banks showed the layoffs were much bigger in Europe than in Asia or the United States. That is a particular blow to Britain where the finance industry makes up roughly 10 percent of the economy.

The tally of nearly 160,000 job cut plans, meanwhile, is likely to be a conservative estimate as smaller banks and brokers are also cutting staff or shutting up shop, and bigger banks have not always disclosed target numbers of layoffs. more> http://tinyurl.com/awnvyok

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• Banks seen shrinking for good as lay-offs near 160,000 (news.yahoo.com)
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Global crisis squeezes Swiss banks

By Tim Devaney – One of Switzerland’s signature industries, Swiss banking no longer has the same allure it once did and could be in for tough times in the years ahead, analysts say, as it struggles to cope with a changing regulatory environment in the wake of the global financial crisis.

Most of Swiss banking is stuck in the past,” said Scheherazade S. Rehman, an international business and finance professor at George Washington University. “One of the fears is that there could be a slow death for Swiss banks down the road. A lot of Swiss banks have disappeared, really you just have a few left.” more> http://tinyurl.com/c7ldwdb

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• Swiss bank UBS cuts 10,000 jobs (bbc.co.uk)
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Swiss Secrecy Besieged Makes Banks Fret World Money Lure Fading

By Elena Logutenkova – When UBS AG (UBSN) celebrated its 150th anniversary in Zurich last month with 600 guests dining on Ossetra caviar and Wagyu beef, there was no jubilation in the executives’ speeches.

Trust “cannot be tied to a far-dated founding year; trust constantly has to be won anew,” Chairman Kaspar Villiger told guests at the dinner prepared by Philippe Rochat, the Swiss chef whose restaurant is one of two in the country to earn three Michelin stars. “Reputation is the most important capital for a bank. It takes just a thoughtless action to lose it and the sweat of thousands to rebuild it.”

Switzerland is the biggest manager of offshore wealth in the world, with about a 27 percent share, according to the Boston Consulting Group’s 2011 Global Wealth report. Clients from Germany, Italy, Saudi Arabia, the U.S. and France make up about 42 percent of all offshore wealth managed in the country. more> http://tinyurl.com/74evop9

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Euro Leaders Aim to Buy Time to Save Currency

By Patrick Donahue – Some 157 billion euros ($203 billion) in debt will mature in the 17-member euro area in the first three months of 2012, according to UBS AG. By the end of that period, leaders have pledged to draft a stricter rulebook for controlling government spending. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Berlin Jan. 9 to work out details.

The key to the euro’s survival may lie with Italy, the group’s third-largest economy and the second most-indebted after Greece. The government in Rome must repay 53 billion euros in debt in the first quarter, about a third of the euro area’s total amount for the period, after Prime Minister Mario Monti passed an emergency budget package aimed at curtailing borrowing costs. more> http://is.gd/zu1MYB

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