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The robust European and US economies have emerged as a major theme at this year's annual meeting of the World Economic Forum, but along with the optimistic outlook comes increasing concerns about larger geopolitical risks around the world. Walter Sinn, managing director of Bain Germany, discusses some of the highlights from the annual gathering in Davos, including the most impressive and inspiring speeches from the event's first day.
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Read the transcript below.
WALTER SINN: So far I must say that the big surprise was that along all one-to-ones and panels there was a common understanding of an economy that is very robust, driven by a strong Europe as well as a strong US. So that's a major theme that one gets, and it surprised me a bit. But it goes along, on the other side, with the perception that the geopolitical risks are heavily increasing or have heavily increased, ranging from Korea to the Middle East to the ongoing refugee issues. So there's a lot of longer-term concerns about [whether there] might there be a sudden break due to political issues.
There are some warning voices, like Stephen Schwarzman, Blackstone's CEO, describing the markets: "Everybody wants to not miss the party." And that reminded me a little bit about Chuck Prince before Lehman saying, "As long as the music is playing, you've got to dance." But, as I said, early warning voices, [but] the general consensus is we are well on track with the economy.
In the opening plenary, we had Prime Minister Modi talking about the state of India and giving a broader perspective on his view of sense of purpose of Davos and, you know, the state of the universe, you could say. And he really impressed me—emotionally impressed me—with his very charismatic speech on globalization, very much in favor of globalization. And then we'll be obviously interested to see how the other politicians during this week will take that on and react on that. That was the emotional point. In terms of intellectually inspiring, there was a great panel with Ken Rogoff from Harvard, David Rubenstein, CEO of Carlyle, and some top bankers—the CEOs of Citi and Barclays—around where we discussed the financial crisis and the learnings from that. And I was strongly inspired and [it] was just very interesting to discuss the learnings from the banking crisis, how bubbles start to develop and what to do against that in the running credit cycle.
First published in Januar 2018