On the question of continuing low borrowing costs and cheap
money in the most-developed economies, one of the factors that
contributed to the global economic crash, participants said that
they are confident that the lessons have been learned and that the
global banking system has emerged stronger from the test.
"I am a little optimistic. I think that we have a stronger system
than three years ago," James Dimon, Chairman and Chief Executive
Officer of JP Morgan & Chase, said during a debate on whether
the world is now better prepared to face a future systemic
Maurice Levy, Chairman and Chief Executive Officer, Publicis
Groupe, the international advertising and communications company,
said that he is particularly concerned about surging asset prices
in China and other leading emerging markets, which are being driven
by the extremely fast growth of cities. "Where you have unremitting
growth, you get crises," he warned.
In part, the leap in global commodity prices, which has already
triggered fears of political unrest in some developing countries
because of soaring food costs, is linked to increasing
urbanization, participants were told. Although rises in commodity
prices can have the advantage of encouraging greater technological
innovation, not all commodities can be easily substituted.
Klaus Kleinfeld, Chairman and Chief Executive Officer, Alcoa,
said that with demand for cars in China, for example, is certain to
continue to expand; there will be no let-up in the global pressure
on steel and copper prices.
But, business leaders were divided on how to approach the issue of
huge state debt built up by some European countries during the boom
Some saw the need for Europe's stronger economies,
particularly Germany, to take part of the load by supporting, for
example, the launch of European Union-backed Eurobonds in support
of weaker economies, such as Ireland and Greece.
But Dimon warned that any "socializing" of states' debts, by
involving other European Union countries in financing them, could
send out the wrong message on the need for fiscal discipline. "You
have got to make sure that some are not piggy-backing on others,"