A return to strong global growth brightened meetings in Switzerland for central bankers from the world's major economies, although the risk of a sharp slowing in China and resurgent inflation shadowed the outlook.
China's central bank governor, Mr Zhou Xiaochua,n offered reassurances to central bankers gathered at the weekend in Basel for the Bank of International Settlements annual meeting that efforts to cool his country's booming economy were working.
"China's economy is in the process of soft landing. Up to now it is quite encouraging," Mr Zhou said. He added further steps will be taken if needed to calm growth at 9.8 per cent rate in the first quarter that is driving up inflation.
Prospects the US Federal Reserve will raise interest rates on Wednesday as it starts withdrawing the huge amounts of cheap cash that have bankrolled global recovery raised few concerns since economies are generally healthy enough to manage costlier financing and markets mostly have braced for the change.
In a major move to bolster the resilience of the financial system to shocks, the Group of 10 central bankers from the largest economies meeting on Saturday also approved a sweeping new bank capital accord, called Basel II.
The agreement modernises capital rules to make bank lending and their balance sheets more sensitive to risk. G10 Chairman Mr Jean-Claude Trichet said the accords, which now must be implemented at national level, would "improve the financial sector's ability to serve as a source of sustainable growth."