Leading central bankers believe a 'progressive normalisation' of the world economy has taken hold, driven by emerging economies, the president of the European Central Bank said today.
'At a global level there is a confirmation of the progressive normalisation of the economy,' ECB chief Jean-Claude Trichet said on behalf of the participants in a meeting of central bankers in Switzerland.
During their first quarterly meeting of the year at the Bank for International Settlements (BIS), they concluded that a global economic recovery was underway.
'We are in the recovery mode, that is something that is very much due to the emerging economies,' Trichet said. He said these economies had shown resilience, describing them as being in 'a more dynamic mode now'.
Warning on banks despite recovery signs
But the ECB chief warned that commercial banks must ensure that they clean up their balance sheets in the wake of the financial crisis to ensure a steady recovery. 'We are telling our banks that they have to do themselves everything to reinforce their balance sheet by all appropriate means,' he said.
The central bankers met the heads of several big banks at the BIS over the weekend to underline the need for a sound financial system to prop up long term growth.
They said afterwards that they hoped that new international standards aimed at bolstering the banking industry's ability to weather future financial crises would be finalised by the end of this year.
Leading central bankers and national regulators in the Basel Committee on Banking Supervision said last month that they were aiming to strengthen financial requirements on banks by the end of 2012, once their proposals were refined and tested this year.
The reforms, which have been in the offing for several months, are part of the international response to the crisis triggered by the collapse in financial markets and several major banks over the past two years, which plunged the world into recession.
