More banks in Europe will have to be bailed out because of the sovereign debt crisis, but overall the situation in the euro zone is improving, Harvard Professor Ken Rogoff told CNBC Thursday.
"It's clear that banks in Europe are hurting and are going to need to be bailed out, some of them, as the sovereign debt crisis plays out," Rogoff said, speaking at the World Economic Forum in Davos, Switzerland.
But the "worst is over" as far as the sovereign debt problem goesand "we're in recovery mode," he said.
"Fundamentally, we're in a more stable growth period, but it's not the kind of exuberant growth we usually see after a recession," Rogoff added.
Barclays CEO Bob Diamond echoed the more positive tone, saying that banks are operating "against a backdrop of more optimism around the global economy and particularly more optimism in the US economy and confidence in the US economy."
Looking to rising prices, emerging markets are experiencing inflationand the only reason their central banks aren't raising rates faster is that they are "panicked" about their currencies rising against the US dollar, which would hurt exports, Rogoff said.