European Central Bank chief Jean-Claude Trichet today called for reform of the fragile global financial system as China's premier Wen Jiabao criticised the policies pursued by the US.
Business leaders attending the four-day World Economic Forum in the Alpine ski resort of Davos also called for major government programmes to tackle the credit crisis that has hit global growth and said any recovery could be years away.
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In a clear dig at the US, Wen blamed a debt-financed spending binge and the blind pursuit of profit for the global financial crisis.
'Inappropriate macroeconomic policies in some economies and their unsustainable model of development, characterised by prolonged low savings and high consumption,' was first in a list of reasons Wen cited for the crisis.
But he said Beijing and Washington should co-operate to tackle the crisis, and backed efforts in the Group of 20 major economies to reform the financial system by tightening regulation and oversight.
'The ongoing international financial crisis has landed the world economy in the most difficult situation since last century's Great Depression,' Wen told Davos delegates.
'We must draw lessons from this crisis and address its root causes. In other words, we must strike a balance between savings and consumption, between financial innovation and regulation, and between the financial sector and the real economy,' he said.
Crisis-hit bankers are thin on the ground at the meeting, leaving policymakers to work behind the scenes on ways to fix the financial system, ahead of the G20 summit in April and a G8 summit in July.
Trichet calls for 'profound' reforms
ECB chief Trichet said that the G20 was doing 'good work' on policies to drag the financial system back into health but that profound reforms were needed.
'Everybody can see the present system is too fragile, and we have to reintroduce an element of resilience and we need to do that without any consideration of any kind of vested interest,' he said.
Corporate chiefs are still reeling with a poll showing confidence has evaporated among top global bosses. A PricewaterhouseCoopers poll of more than 1,100 CEOs set a grim backdrop to the annual gathering.
Just 21% of CEOs said they were very confident of growing revenue in the next 12 months, down from 50% a year ago. Most business leaders said they expected no more than a slow and gradual recovery over the next three years.
Avoid 'economic selfishness' says Putin
Meanwhile, Russian Prime Minister Vladimir Putin called on the world to avoid sliding into isolationism or 'economic selfishness' as a result of the global financial crisis.
Addressing the World Economic Forum this evening Putin also said the world needed a range of reserve currencies and more policy openness in the countries which issued them. Countries should try to avoid the blind belief that the state could solve all problems, he added.
Wen will meet Putin privately in Davos to share ideas on how the powers can cooperate on addressing economic problems. No top officials from the new Obama administration are in Davos.
