Emerging from the two-hour meeting as its unofficial spokesman, U.S. Representative Barney Frank made it clear that governments were now calling the shots after spending billions to bail out the industry.
Top bankers, by contrast, who came into this week's World Economic Forum buoyed by signs of economic recovery, left somewhat subdued even as they called the closed-door meeting constructive.
"No one got up and said, 'Don't regulate us,'" said Frank, a Massachusetts Democrat who heads the U.S. House Financial Services Committee. "It would have been a waste of their time if they did."
The meeting comes after days of tension at this Swiss Alpine resort over government plans for stricter controls on the financial industry to limit speculation and avoid a repeat of the 2008 meltdown that plunged the world into recession. Bankers have protested, saying the U.S. and other countries risk choking off a gradual economic recovery with regulation they see as heavy-handed.
The event was not on the forum's official agenda, but quickly became the most significant development of the day.
"We are determined to do strong, sensible regulation," Frank said, rejecting any notion that President Barack Obama's administration could sink the economy again with too many new controls on the banking industry.
"That's nonsense," Frank told reporters. "What we're trying globally to recover from is a total lack of regulation."
On the government side, those at the meeting included Lawrence H. Summers, Obama's top economic adviser, British treasury chief Alistair Darling, French Finance Minister Christine Lagarde and Jean-Claude Trichet, president of the European Central Bank, which oversees the 16-nation euro zone.
Bankers attending the private talks included Josef Ackermann, chief executive of Deutsche Bank AG, Bank of America Corp. CEO Brian Moynihan and JPMorgan Chase & Co. Chairman Jacob Frenkel.
"It was the most constructive dialogue I've seen between policymakers and industry officials and hopefully that's a base people can build from," said Duncan Niederauer, CEO of stock exchange operator NYSE Euronext Inc. "It was the first time I've seen both sides go beyond the rhetoric. There were practical suggestions being discussed."
The banks were asked for their input, Frank said, adding that he believed they got the message that tighter controls were coming.
"Frankly it doesn't matter if they did or didn't," Frank said. "They aren't in charge of this."
Frank said the most important element of the meeting was coordinating and better understanding the various approaches that governments are taking to stabilize and prevent excessive risks in their financial industries.
The aim was not to push for a global financial governing system, Frank said, saying each country could deal with the crisis on its own terms.
