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Bankers To Face Heat As World Economic Forum Opens In Davos

Participants listen to speakers during the session "What is the 'New Normal' for Global Growth ?" on the first day of the World Economic Forum in Davos on January 27.
The world's top business and political leaders are gathering in Davos, Switzerland for the start of the annual meeting of the World Economic Forum.

Some 2,500 members of the world's elite are expected to attend the five-day event, which is held in a picturesque Alpine ski resort town and features as many glittering dinners as it does intense discussions about the world's most pressing problems, from the environment to the economy.

Attendance at Davos is by invitation only, and around 75 percent of the attendees are business leaders, including more than 1,000 heads of the world's biggest companies.

Heads of governments and leaders from academia, the development field, prominent NGOs, and even a few socially active movie-stars also get invitations.

German economist Klaus Schwab, who founded the World Economic Forum, says this year the mantra for participants is to "rethink, redesign and rebuild" the state of the world.

That includes a special focus on generating help for earthquake-ravaged Haiti. Schwab said he wants "to use Davos to solicit commitments of [the Forum's] partners, members and constituents in the form of practical help for relief of the continued pain of Haiti's people and particularly for the reconstruction of Haiti."

On the eve of the meeting Schwab told CNN that the near-catastrophic global recession has left people determined to understand what went wrong and how to prevent a repeat. And he echoed the fears of some analysts who say the current recovery is still so fragile that it might not end with a full recovery but a return to a state of crisis.

The latest projection of economic growth from the International Monetary Fund (IMF) says otherwise, however.The group has increased its projection of how much the world's economy will grow in 2010 from 3.1 percent six months ago to 3.9 percent.

The IMF says the unexpected growth spurt is being led by China, who some analysts have predicted could overtake the United States in gross national production before 2020.

China's new economic muscle on the world stage will be hard to miss at Davos. Reports say the country is sending the biggest delegation in the World Economic Forum's 40-year history: some 54 Chinese officials and business executives, including the heads of the country's sovereign wealth fund and export-import bank.

Barry Bosworth, an economist at the Brookings Institution, says rather than feeling threatened, the West should see China's rapid evolution from an emerging economy to the force behind the global recovery as an opportunity.

"It does make the Western countries give more weight to the fact that this is an area of the world which is growing much faster than old Europe and old United States," Bosworth says. "It's more dynamic, it's big opportunities for [Western businesses] because it's also a rapidly growing market. It's not just a production machine anymore. It's a place to market."

Hundreds of bankers stayed away from last year's World Economic Forum rather than face searing public hostility over their role in creating the global economic meltdown.

This year, most are expected to return, but they'll be facing the fallout of that anger in the form of efforts by several governments to impose more restrictions on the banking industry and gain greater oversight of its activities.

The heads of Deutsche Bank, Bank of America, Citigroup, and HSBC are all expected to appear in person to face down attempts by the United States, France, and Great Britain, among others, to impose new rules and taxes on lenders, to limit how big some banks can get, and to win repayment of some of the trillions of public dollars used to bail out the industry.

One of the banking industry's fiercest critics, French President Nicholas Sarkozy, was expected to set the tone in his opening speech.

Adding to bankers' woes is a new restriction on environmentally unfriendly limousines, which is how many wealthy participants arrive in this snowy town.

The World Economic Forum has adopted new guidelines under its climate change initiative that bans vehicles that get low gas mileage, which includes most luxury cars.

But environmentalists have derided the measure as a public relations move because heads of state and other dignitaries can get a waiver for security reasons.

They also point out that the measure says nothing about the tons of emissions produced by the many airplanes, private jets, and helicopters conference participants rely on to arrive at the airport.

compiled from agency reports