For some reason which is obvious to people much smarter than me the British government is trying to arrange a meeting of the world’s largest banks next weekend and ahead of the April 20 G20 summit meeting.

Here is what Reuters reports about this:

Mitsubishi UFJ Financial Group president Nobuo Kuroyanagi would attend the meeting, which the paper said would discuss regulations to prevent further crises similar to the meltdown of the subprime mortgage market. 

The London summit will follow last November’s G20 crisis meeting in Washington and aims to agree on coordinated actions to revive the global economy, regulate the financial sector and principles for reforming international financial institutions. 

In the lead up to the summit, European leaders have called for tighter global banking supervision while U.S. President Barack Obama has urged a sweeping overhaul of Wall Street regulations.

The European Commission’s proposals range from tougher bank capital rules to streamlining supervision, more transparency in derivatives markets and proposals to penalise banks whose remuneration policies encourage excessive risk-taking. 

China said on Saturday it wanted a major say in talks about reworking the global financial order and there should be more power for developing countries in the International Monetary Fund and World Bank.

I have no more idea than you about what’s going on here. It sounds to me like one of those things that you know upfront is a losing proposition whether you go or not. Go and you just set yourself up as a punching bag for the politicians and stay away and you set yourself up as a punching bag for the politicians.

They aren’t asking me but if I were a major bank CEO I would just let the leaders of the world have at it and propose what they will. Right now they’re on a roll and hold the high ground when it comes to PR. Let them dig their own holes, don’t help out and sooner or later saner heads will prevail.

These guys (the political class) are looking for command and control. Note how often the compensation control issue keeps raising its ugly head. Make them show their hand and I firmly believe that you can turn this issue around. Play footsie with them and they will prevail.

Hard as it might be right now, business and bankers need to get off of the defensive. A little spine right now will go a long way, gentlemen.