Davos 2013: World markets calmer but risks remain, top bankers say

Global markets have calmed significantly in the past year, but the world economy is not out of the woods yet, a panel of top officials and bankers said Wednesday as the World Economic Forum opened.

At the first formal session of the five-day gathering of the world's top business and political leaders, deputy head of the International Monetary Fund, Min Zhu, drew a contrast between today's mood and that of last year's meeting.

"At this particular moment, things are much better than 12 months ago. A year ago here, we were really concerned about the euro crisis, the US fiscal cliff," said Mr Zhu.

"With all the policy actions, much has calmed down now but we've got to be very careful. The tail-risk has been moved off the table but there are issues still there," he added.

Jamie Dimon, chief executive of JP Morgan Chase, said the United States was "in pretty good shape" and added that the eurozone had "stabilised" but warned financial crises would continue until better market regulation was in place.

"If we do everything right, we will get out of this. If we don't, this could last another 10 years," said Mr Dimon, one of the world's top bankers.

This year's World Economic Forum in Davos takes place against a backdrop of less volatility on the financial markets, but a former head of the German central bank, Axel Weber, warned against "kicking the problems down the road."

"I think we are heading into a very dangerous environment," said Mr Weber, now the head of Swiss banking giant UBS.

He said action by the world's central banks to shore up confidence in the markets was nothing but a "short-term fix" and complained that "we are living now at the expense of future generations."

Mr Weber resigned as head of the Bundesbank in protest at the European Central Bank's plan to buy the bonds of struggling eurozone countries and quipped: "My views haven't changed since then."

And Tidjane Thiam, chief executive of Prudential, Britain's biggest insurer, said there was little prospect of preventing a future crisis.

"There are people working out how to prevent having a crisis again. They are wasting their time because there will be a crisis again," said the insurance boss.