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French President Calls for Better Banking Principles

  • Lisa Bryant

French President Nicolas Sarkozy is calling for tougher banking regulations and attacked the excesses of a freemarket economy in Wednesday's keynote address at the World Economic Forum in Davos, Switzerland.

French President Nicolas Sarkozy appealed for a more humane world economy, one governed by more rules and principles. In his address to some of the world's top business leaders and politicians at the World Economic Forum in Davos, he harshly criticized a freewheeling system that led to the world's biggest economic crisis in decades.

His remarks, translated into English, were webcast live from the Swiss resort on the opening day of the forum.

"The tremendous question we have to ask ourselves in the 21st century is how we can [put] the economy to the service of mankind," he said. "That, ladies and gentlemen, is the question that any leader must seek to answer. How can we act to ensure that the economy no longer appears as an end to itself, but a means toward an end?"

Mr. Sarkozy called for financial and economic reforms that take into account environment, health, development and labor concerns. He called for new accounting rules and limits on executive pay. But he sought to ease fears of over regulation.

"Let me be clear. Let us be clear about this ... we are not asking ourselves what we will replace capitalism with, but what kind of capitalism we want," he said. "The crisis we are experiencing is not a crisis of capitalism. It is a crisis that is the result of the skewing of capitalism."

The French president's remarks underscore a main theme of this year's Davos forum, how to steer the world out of the economic crisis and onto a more sustainable path. About 30 heads of state and hundreds of banking and academic leaders are gathering at the Swiss resort for the annual meeting that lasts until Sunday.

The day's speakers included billionaire investor George Soros, who backed U.S. President Barack Obama's call to limit the size of banks, but said the plan was premature and did not go far enough. Other speakers warned that too many new regulations could hurt economic recovery.

Topics for discussion during the next few days include rethinking Africa's growth strategy, revamping development aid and rebuilding Afghanistan.