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Standard Chartered CEO Sees Inflation Down The Road

At a time when the future of the economy is dependent on global opportunities and the international landscape, people need to understand where the most opportune countries are.

Peter Sands, CEO of Standard Chartered, told Maria Bartiromo, “We’re lucky to be in one of the ‘right’ parts of the world.”

International Monetary Fund Special Adviser Min Zhu, Wipro chairman Azim Premji, Professor of Economics Nouriel Roubini, Time International editor Michael J. Elliott, WPP CEO Sir Martin Sorrell and Ernst & Young CEO and chairman James S. Turley.
Fabrice Coffrini | AFP | Getty Images
International Monetary Fund Special Adviser Min Zhu, Wipro chairman Azim Premji, Professor of Economics Nouriel Roubini, Time International editor Michael J. Elliott, WPP CEO Sir Martin Sorrell and Ernst & Young CEO and chairman James S. Turley.

One of the things that will really characterize the world economy are the different opportunities. Sands is seeing a strong economic recovery in Asia, but relatively sluggish economic growth in Europe and North America.

Sands stressed that inflation is going to be major issue in fast-growing markets, as well as in the West. There will be an aftermath to monetary stimulus, which will translate into inflation.

He said thus far Asian policy-makers have gotten right; they are “already intervening very actively in residential property markets and the way banks interact with commercial development.” The buzz word, Sands said, is “macro-prudential regulation.” The West should learn how to use these tools, and early on.

What about the Middle East?

High oil prices are advantageous for this part of the world and Sands is positive on Dubai. Its tourism and role as a hub is doing really well and will work its way through its issues.

What will it take to turn Europe around?

Davos 2011 - See Complete Coverage
Davos 2011 - See Complete Coverage

“There isn’t a quick way out of it.” Europe, and other nations, need to grow and to prune. Right now, Europe is engaged in the slow and painful process of getting out of [the crisis]," said Sands, who added he “wouldn’t underestimate Europe’s capabilities.”

The main concern, for western policy-makers: Focus on micro-prudentials in banks. But, there is only so far you can get by making individual banks safer and more resilient. One also has to address the system as a whole, and look into the area of macro-prudentials.

“Less progress and attention has been paid to that and that’s what I want to see," said Sands.


Donna Burton, Kerima Greene and Crystal Lau contributed to this blog.

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