Davos leaders look beyond 2016's early market mayhem

Wed Jan 20, 2016 2:50pm EST
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By Kirsten Donovan and Elizabeth Piper

DAVOS, Switzerland (Reuters) - Blood-letting in global markets is dominating corridor talk as business leaders and policymakers meet in Davos, although so far the view is that it doesn't signal a financial crisis.

As the World Economic Forum's annual meeting in Switzerland wrestled with topics ranging from the impact of robots on jobs to gender and wealth inequality, the MSCI World equity index .MIWD00000PUS fell to its lowest level since July 2013.

If sustained, the 9.9 percent fall in the index in January would be the worst monthly loss since 2009, towards the end of the global financial crisis.

"I don't believe this is a repeat of 2008...that is not to say that there are not some very significant risks impacting the market - not least of which is China's slowing growth," John Veihmeyer, Global Chairman of accounting group KPMG, said in the Reuters Global Markets Forum on Wednesday.

The International Monetary Fund (IMF) cut its global growth forecasts for the third time in less than a year to 3.4 percent on Tuesday, as new figures showed that the Chinese economy grew at its slowest rate in a quarter of a century in 2015.

While China's rapid slowdown, combined with a dramatic fall in the price of oil, has spooked investors around the globe, European Economics Commissioner Pierre Moscovici told Reuters Television he too did not believe there would be any return to an international financial crisis.

"I don't feel that the financial crisis is coming back... but there are downsides that we need to address," he said.

"There are worries...especially about China which is undergoing a transition which is difficult and uncertain."   Continued...

A person passes by a logo of the World Economic Forum (WEF) in the congress centre during the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 20, 2016.  REUTERS/Ruben Sprich