Tags: Sarkozy | capitalism | market | Davos

Sarkozy Slams Market Capitalism in Davos

Thursday, 28 Jan 2010 09:48 AM

French President Nicolas Sarkozy has launched a wide-ranging attack on the structure of market capitalism, saying currency exchange rates must be controlled and that the greed and irresponsibility of the system has not been tackled.

In a speech at the World Economic Forum in Davos, he called for exchange rate controls to prevent the dollar being the world's benchmark currency.

He also said that the huge salaries for executives at the top of banks would no longer be tolerated and warned that - although he agreed with President Barack Obama's plan to ban proprietary trading in banks - if countries went it alone in banking regulation the whole system would fail.

"If competition is skewed by prudential rules that remain very different from one country to another, if we cannot coordinate our efforts, how can we be surprised that so many players consider it normal to return to the habits they had before the crisis?" he said.

He agreed with Gordon Brown's proposal for a global financial transaction tax - a "Tobin" tax - or insurance levy on the finance sector.

He announced that France wanted to see "a new Bretton Woods" agreement to control exchange rates and the role of the dollar. He said the issue would be "put on the agenda" when France chairs both the G8 and the G20 in 2011.

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