One duty of the journalist at Davos is to judge the mood, in the hope that this provides intelligence on the year ahead.
So here it is by common agreement, this is a transition year with the worst of the crisis now behind us.
I’m not sure I agree with this prognosis, and it is certainly one of those old truisms that the moment everyone begins to relax is the point to start worrying most. The dangers of relapse are all too obvious.
It took Mark Carney, the Bank of England’s governor in waiting, to remind everyone that the cautious mood at the start of the meeting had by the end shifted to a belief that tail risk has been entirely eliminated. He didn’t agree, and nor would anyone else still in possession of their faculties.
Maybe it’s something to do with the mountain air and the partying, but that’s the way of Davos. The meeting always ends more upbeat than it began. Having set the world to rights, business leaders and policymakers descend from the mountain and carry on much as before.
But for a much over-interpreted speech delivered a couple of months back in Toronto, this was Carney’s first, on-the-record outing since bagging the job, so what did it tell us about what he’s got in mind for the UK?
Second, he believes it is worth keeping up the easy money guidance until the economy achieves escape velocity, rather in the way Ben Bernanke, chairman of the Federal Reserve, has in the US. The present Bank of England incumbent, Sir Mervyn King, has tended to eschew such practices.
Providing this is consistent with achieving price stability in the medium term, and a clear time frame is given, Carney does not seem to see much wrong with adopting more overt growth objectives.
And finally, he thinks that the growth in shadow banking and the too-big-to-fail issue have to be quite urgently addressed. This is all reassuringly straightforward and sensible stuff, and not so dissimilar to what the Bank of England has been doing.
Unfortunately, the message seems to have become somewhat lost in the Bank’s embarrassment at repeatedly missing the inflation target. It’s all in the way you say it, and we can expect to see Carney finesse the guidance in a way that gives markets and business a lot more confidence than we have seen to date.
I don’t want to be unduly critical of Sir Mervyn, whose public service in difficult times has been exemplary, but his Eeyore-type proselytising and determination to bullet-proof the banking system has had a quite chilling effect on sentiment and credit growth.
Reading between the lines, Carney is not at all keen on the more radical monetary options touted by one of his rivals for the job, Lord Turner, such as monetising the deficit or helicopter money. These leave no escape route, so that when economic activity picks up, it is difficult to remove the stimulus, ramping up inflation.
And then finally on the big issue of whether easy money should be accompanied by some loosening of fiscal austerity, Carney was right on message. Monetary policy must be set to accommodate the fiscal squeeze, he said.
As I say, reassuring stuff.