THE global economy is recovering from the worst recession in 70 years with "dynamic" emerging markets leading the way, top policymakers said yesterday at a meeting in Switzerland.
"There is a confirmation of the progressive normalisation of the economy and of the fact that at a global level we are on a recovery mode," European Central Bank (ECB) president Jean-Claude Trichet told a news conference.
Emerging economies "demonstrated resilience" during the recession and are "very, very clearly in a more dynamic mode now" while the world's biggest economies emerged from recession in the third quarter of last year.
Chinese experts said that gross domestic produce may expand 16pc this year as the country overtook the United States to become the world's largest car market.
Mr Trichet, speaking on behalf of the world's central bankers, warned that financial institutions must improve their risk management after the recent crisis.
He spoke after meeting in Basel with his counterparts from the world's largest central banks, including China's Zhou Xiaochuan and Fed chairman Ben Bernanke. The meeting was not attended by Central Bank of Ireland governor Patrick Honohan.
"We have to get risk management very significantly improved by market participants and financial institutions," Mr Trichet said.
Policymakers are concerned about excessive risk taking, which led to the credit bust of 2007 and prompted central banks to take unprecedented measures, could be repeated.
Officials have reduced interest rates to record lows and flooded markets with cash to fight the crisis and revive lending.
Markets are rediscovering their appetite for risk after central banks helped to pull the global economy out of recession. The MSCI World Index has surged about 75pc from lows last March. Copper has more than doubled in the last 12 months and crude oil rose to a 15-month high of $83.95 a barrel yesterday.
Policymakers met with executives from financial institutions, including Deutsche Bank boss Josef Ackermann, at the weekend, but Mr Trichet declined to comment on those talks yesterday.
"We're working very actively on this domain," he said, referring to the improvement of risk management at financial institutions. "We have to make sure everybody gets the message."
The ECB president said his remarks shouldn't be "interpreted" in relation to future monetary policy decisions. The ECB's governing council holds its next policy meeting in Frankfurt on Thursday as several major organisations raise their growth predictions.
The International Monetary Fund may raise its 3.1pc forecast for 2010 global growth later this month, deputy managing director John Lipsky said last week. (Bloomberg and Reuters)