Business leaders call for more crisis leadership

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Markets cautiously welcomed the dramatic move by the Federal Reserve on Tuesday, but business leaders gathering in the Swiss ski resort in Davos for the annual meeting of the World Economic Forum called for stronger leadership on a global level.

"The thing that markets are desperate for right now is leadership, whether globally or regionally, and it seems this is lacking," John Studzinski, head of U.S. private equity firm Blackstone's advisory business, told Reuters.

"Until the markets see a lot more leadership on a proactive basis rather than a reactive basis you are going to continue to feel this great anxiety and feel this frustration."

Business and political leaders begin meeting in Davos on Wednesday facing what many fear could be the biggest financial crisis since World War Two.

The emergency U.S. interest rate cut on Tuesday, after two days of plummeting stock prices, set the tone for the WEF annual meeting where financial, industrial and political figures, including U.S. Secretary of State Condoleezza Rice, are awaited.

Stephen Roach, head of Asia for U.S. investment bank Morgan Stanley, said the Fed may have let itself be goaded into action by a market panic.

"We have a market friendly Fed possibly injecting a lot of liquidity in the system which will set us up for another bubble economy," Roach told Reuters.

"I'm sort of worried that all they did yesterday was to hit the snooze button," he said. "(This is) excessive monetary accommodation that just takes us from bubble to bubble to bubble."

REALISM, REACTION

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