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Jeremy Warner: Roach enjoys his day in the sun

Thursday 29 January 2009 01:00 GMT
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Outlook He claims to take no pleasure in eventually being proved right, but Stephen Roach, chairman of Morgan Stanley Asia and a regular fixture of these mountain-top conferences, is living in clover.

For years he's been predicting that the American consumer boom would end badly, that is, in a serious worldwide recession. It's been a long time coming, but finally the moment has unambiguously arrived. Mr Roach can be mocked no longer for his unrelenting gloom.

Mr Roach has always had a knack for putting his view in compelling, succinct and robust form, and there was no shortage of his no-nonsense take on events yesterday.

He was characteristically dismissive of all the talk in Davos of a multinational authority to deal with trade and capital imbalances – which are considered by many to be the root cause of the global credit crisis.

We definitely need such anauthority, Mr Roach agreed, but with no country willing to cede national sovereignty on such matters, it was hard to see how anything worthwhile would emerge.

A watchdog that can talk but not bite was close to pointless, he said.

Until there is an authority with internationally accepted enforcement powers, the movement for global reform was going nowhere.

He could see zero progress on this front, he said. It's hard to argue. Brave intentions on international cooperation are one of the presiding themes of Davos. Yet it tends to be more talk than action.

Will Davos this year defy the sceptics and lay the groundwork for turning fine words into decisive action? We shall see.

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