Chiding world's markets
George Soros called for a "new sheriff." Later, Secretary Rice tried to reassure the forum.
DAVOS, Switzerland - Billionaire George Soros called for a massive injection of regulation and oversight of financial markets, whose excessive freedoms have caused "not a normal crisis, but the end of an era."
The Hungarian-born financier and philanthropist commanded center stage at the World Economic Forum with a dire analysis of recent days' market turmoil and a call for the creation of a "new sheriff" for global finance - details to be worked out later.
Separately at yesterday's session, Secretary of State Condoleezza Rice, in a nod to the anxiety that has enveloped the forum, said the U.S. economy was resilient and would remain an "engine of growth."
Speaking to an audience of chief executive officers and world leaders, Rice said the $150 billion stimulus package proposed by President Bush would "boost consumer spending and support business investment this year."
The message from Soros was stark and jarring coming from one of the richest businessmen in the world - albeit one who is no stranger to controversy and politics and has seemed to pride himself on being a maverick.
"Authorities ought to go in and examine the books" of financial institutions, Soros said - and provide assurance that "they will rescue and even take over banks that become insolvent."
Soros blamed the U.S. Federal Reserve for keeping interest rates too low for too long. Alan Greenspan, the former chairman of the U.S. central bank, "will not look good in retrospect," he said, adding that successor Ben S. Bernanke also bore some of the blame, since "the Fed has been somewhat asleep at the wheel."
The low interest rates fueled a decade-long U.S. housing boom whose apparent bursting during the last year has reverberated around the globe - and revealed banks the world over as vulnerable to investment vehicles of seemingly unfathomable complexity.
In her remarks, Rice said: "I know that many are concerned by the recent fluctuations in U.S. financial markets, and by concerns about the U.S. economy. President Bush has announced an outline of a meaningful fiscal-growth package that will boost consumer spending and support business investment this year."
The U.S. economy is "resilient, its structure sound, and its long-term economic fundamentals are healthy," she said. "And our economy will remain a leading engine of global economic growth."