Sufficient Financing to Aid Troubled Banks, European Officials Say

DAVOS, Switzerland â€" There will be enough money to recapitalize banks that fail a review by the European Central Bank later this year, top European leaders said on Saturday, seeking to assuage lingering doubts whether policy makers will succeed in cleaning up the financial system and restoring the flow of credit.

Jeroen Dijsselbloem, president of the Eurogroup of euro zone finance ministers, said at the World Economic Forum that if ailing banks were not able to raise capital from investors, they would draw it from their own governments, and as a last resort, from the European bailout fund.

“The instruments are there,” Mr. Dijsselbloem, who is also the finance minister the Netherlands, said during a panel discussion.

That level of certainty surprised at least one of the experts on the panel, Adair Turner, a former top bank regulator in Britain. Reflecting a widespread concern, Mr. Turner had expressed doubt whether Europe was prepared for the consequences if the European Central Bank’s scrutiny of the largest banks in the euro zone uncovered any that had grave problems that were previously hidden.

“Is that already agreed?” he asked, referring to use of the bailout fund, the European Stability Mechanism.

Mr. Dijsselbloem replied that euro zone finance ministers had agreed in principle and would grant final approval in March. “We will deal with all these issues,” he said.

Among policy makers and many in the banking industry, there is broad agreement that Europe needs to carry out the same kind of rigorous cleanup of financial institutions that the United States did in 2009, helping restart lending and create the conditions for economic recovery.

The European Central Bank is in the process of scouring bank books, looking for bad loans, sour investments or other problems that banks may have kept hidden. Fear that some banks are papering over serious problems has made it difficult for all banks in the euro zone to raise money that they can lend to businesses and consumers. The aim of the review is to ultimately restore the credibility of banks in the 18 countries of the euro zone.

“There is still a clear lack of trust in the European banking system,” said Federico Ghizzoni, chief executive of UniCredit, the largest bank in Italy. “This has to be dissipated thanks to this exercise.”

In the United States, banks with problems were forced to take capital from the government if they could not raise it themselves from investors. But Germany and some other countries have been reluctant to help finance bank cleanups in other euro zone countries. And there has been doubt whether countries like Portugal, already struggling with excess government debt, could afford bank rescues if any were needed.

Also on the panel was Wolfgang Schäuble, finance minister of Germany, who did not contradict Mr Dijsselbloem. “It will work, it has been decided,” Mr. Schäuble said of the bank recapitalization plan, though he added that money would also come from a fund paid for by the banking industry, and only after bank creditors and shareholders had contributed.

Echoing comments made on Friday by Mario Draghi, the president of the European Central Bank, Mr. Dijsselbloem insisted that the review of banks would be comprehensive, in contrast to earlier attempts that failed to uncover serious problems.

“I rather hope that it’s going to unveil some unpleasantness because that would give me a good feeling that it has been done properly,” he said.

However, some on the panel doubted that lack of trust was the only reason that lending to businesses in the euro zone has been on the decline. Many businesses are reluctant to borrow money because of uncertainty about the strength of the economy, said Anshu Jain, co-chief executive of Deutsche Bank, Germany’s largest bank.

“There is a demand side problem as well,” he said.

With Some Investing Help, Huffington Unveils a New International Venture

DAVOS, Switzerland â€" Arianna Huffington has long labored to make her online media empire a truly global one. Now she has enlisted an old friend with deep pockets to make a big step in that direction.

This week, Ms. Huffington and Nicolas Berggruen, a billionaire investor, unveiled the WorldPost, a splashy new venture under The Huffington Post umbrella aimed at covering a host of international issues.

WorldPost, whose ownership is split between The Huffington Post and the Berggruen Institute on Governance, fits into the model of its media parent. Since going live, the site has featured staff-reported stories and contributions from celebrities and friends of Ms. Huffington, including Bill Gates; the entrepreneur Elon Musk; and Lawrence H. Summers, the former Treasury secretary.

But Ms. Huffington and Mr. Berggruen said in a joint interview that WorldPost would be more selective than the freewheeling Hufffington Post. While the site will feature contributions from both boldfaced names and lower-profile writers, the curating process will be more thorough.

“The quality bar you have to clear is high,” Ms. Huffington said.

Of course, it helps that the two each have a deep network of friends and contacts who can contribute high-profile pieces. Hence Richard Branson’s piece on business saving lives, and a conversation with the cellist Yo-Yo Ma on how arts can build empathy around the world.

Those are precisely the type of high-minded, globally focused topics that dominate the World Economic Forum here. Indeed, earlier this week Mr. Summers and Mr. Gates spoke about a new initiative to spur government investment in health care, which Mr. Summers also wrote about in the piece he contributed to WorldPost.

WorldPost’s approach to the topic, Ms. Huffington said, would be to blend reports on the latest studies about the economic impact of government investments in health, along with submissions from both the likes of Mr. Summers and unheralded experts.

“We’d welcome anybody who’s thoughtful and whom we can learn from,” Mr. Berggruen said.

The site was borne from numerous discussions between Ms. Huffington and Mr. Berggruen over the years. Among the most prominent topics: Could they create a media venture that produced quality journalism and covered topics that they believed got short shrift elsewhere?

Rather than buying an existing media organization â€" Mr. Berggruen had weighed bidding on a few â€" the two instead decided to create one.

Like The Huffington Post, WorldPost will draw revenue from sponsorships, advertising and conferences. Ms. Huffington added that The Huffington Post’s existing sales staff, which has expanded as the publication has branched out into countries like Spain, France and soon Brazil, would service the new venture as well.

While Mr. Berggruen declined to say how much his organization had invested â€" “it’s a meaningful amount,” he said â€" he added that it aimed to be profitable. Making money isn’t the primary aim, he said, but it will make the publication more sustainable.

But he added that the site would also syndicate its content, giving it to anyone who asks in what he described as an open system.

“We want an impact,” he said.

Social Responsibility Weighs Heavy on Economic Chieftains at Davos

DAVOS, Switzerland â€" With all that vexing talk about inequality, do the world’s plutocrats need a cuddle?

At this year’s World Economic Forum, there have been numerous soul-searching sessions about how to achieve a worthy life and true happiness. There was a dinner dedicated to “mindfulness,” another to “the importance of being happy,” and a daily meditation run by a Buddhist monk.

For those wanting to experience real hardship (for an hour or so) there were multiple sessions each day that attempted to simulate what it is like to be a refugee in a camp. During these sessions actors dressed up as soldiers stormed in, pretending to beat up another actor dressed up as a refugee and firing fake gunshots. Sheryl Sandberg of Facebook and Peter Brabeck-Letmathe of Nestle were among the executives who participated.

“It used to be just bankers that were bashed,” the chief executive of a large European consumer goods company said with a sigh after coming out of his morning trance. He spoke on condition of anonymity, perhaps not wanting to seem as if he was complaining. “Now it’s all of us.”

From the start of this Alpine schmooze-fest, the assembled chieftains of industry have heard from economists, charities and even a messenger from Pope Francis about their responsibility to share their riches.

“The growth of inequality demands something more than economic growth, even though it presupposes it,” Pope Francis said in a message read by one of his cardinals at the conference. “It also calls for decisions, mechanisms and processes directed to a better distribution of wealth, the creation of sources of employment and an integral promotion of the poor which goes beyond a simple welfare mentality.”

The Pope added, “I ask you to ensure that humanity is served by wealth and not ruled by it.”

Many, of course, agreed. Richard Branson of Virgin said those lucky enough to have “made wealth” should support philanthropic causes. “Once you have paid for breakfast, lunch and dinner, once you have paid for your children’s education, once you have a roof over your head, you don’t need that much more,” he said, urging fellow billionaires to give generously.

Tax increases on the wealthy were less popular. Even the tax increase of roughly 0.5 percent on those making half a million dollars or more proposed by New York Mayor Bill de Blasio prompted many to warn that this would “send the wrong signal” and shift incentives too far. “It might be enough to persuade people to move out of the city,” said a New York-based fund manager.

Indeed, some at Davos bristled at any notion of directly taking money from their wallets. For Anthony Scaramucci, the head of the investment firm SkyBridge Capital, attendees must work on creating more opportunities for others to climb the economic ladder. But anything more drastic, he said, was out of the question.

Mr. Scaramucci, who is a prominent Republican donor in the United States, said that he had noticed some hints of economic populism here. He placed some of the blame for that on President Obama and others who, he said, argue that the “cool thing” is to redistribute wealth.

Referring to Paul Singer, the head of the $23 billion hedge fund Elliott Management and a Forum attendee, Mr. Scaramucci said, “To take it from Paul and give it to someone else, I think that’s unfair.”

Michael J. de la Merced contributed reporting.