The gloves came off in Davos on Thursday. Union leaders launched a ferocious attack on the politicians and executives who they said had failed to tackle a financial crisis that was threatening the jobs of tens of millions of people.

At the same time, business leaders stepped up their assault on the bankers with Indra Nooyi, chief executive of Pepsico, attacking Wall Street for infecting Main Street.

This infuriated one senior banker, who told me it was pretty rich coming from a chief executive whose products should carry a health warning.

This is a bit over the top, of course. Pepsico's fizzy pop may not be great for your children's teeth but it hasn't brought the global financial system to its knees. Nevertheless, it illustrates the frustration some thoughtful bankers feel at what they see as ill-informed, populist analysis that is leading to serious policy mistakes.

“I don't care for us, but forcing banks to be 40 to 50 per cent overcapitalised is very expensive for society.”

This warning was echoed by Jean-Claude Trichet, head of the European Central Bank, who said the markets were putting pressure on the banks to hold too much capital, which was aggravating the economic downturn. The Davos pessimism contest continued yesterday, with economists and business leaders competing for the low ground in terms of their forecasts for the global economy. Tony Blair joked that the atmosphere was more depressing than he was used to as Middle East Envoy.

It was not all gloom, however. Bill Clinton argued that the US fiscal stimulus package combined with the plan for a bad bank to house toxic assets would mark the turning point for the US financial system, a view shared by many senior bankers. They are also feeling a bit more positive about life after a few weeks of better trading.

But fixing the financial system won't take us back to the good old days. The US consumer boom, which drove so much of the world's economic growth in recent years, is over and will not return for the foreseeable future.

Worse still, there is nothing to take its place. Zhu Min, a senior executive at Bank of China, forecast that US consumer spending could fall by $1,000 billion this year.

But won't China step into the gap? Sadly not, says Mr Zhu. Chinese consumer spending is way too small to fill the hole, even if it continues to grow at 20 per cent a year.

It will take a decade for the US economy to return to balance after years of overconsumption, warns Mr Zhu. Americans will just have to get used to being poorer. As indeed will the British, a point unlikely to be highlighted by Gordon Brown when he arrives in Davos today.

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