HONG KONG: There are growing signs inflation could be brought under control, top bankers said at a summit in Hong Kong Wednesday, but geopolitical risks will continue to inject volatility and a global recession is still on the cards.

The event drew around 250 participants including the heads of some of the world’s largest banks.

Few panel speakers opted to address in any detail the increasingly complex financial risks in China, but they did offer an assessment of the wider global economy facing testing times.

“My gut is the central banks will, in aggregate, tame inflation,” Morgan Stanley CEO James Gorman said.

“It’s highly improbable we’ll get back to the kind of one to two percent inflation we enjoyed before this crisis, more like around four percent over the next few years, and we’ll have to deal with that.”

UBS group chair Colm Kelleher said that earning multiples in the United States are beginning to be revised and valuations in certain areas are attracting funds.

“There is a feeling that you know, the central banks will get this under control and then there will be there will be bright spots for investing,” Kelleher said.

But he was negative about Europe’s prospects and said businesses are watching closely as to whether China will move away from its strict Covid-19 controls.

Goldman Sachs CEO David Solomon said that the global economy is undergoing a rebalancing period, which in the past usually takes between two to four quarters.

“There’s still a significant amount of uncertainty but as we get into 2023... I think you’ll see issuers and capital allocators meet again in the middle,” he said.

“We’re now in a period of quantitative tightening. And all of this, combined with inflation and a very quick tightening of monetary conditions, makes the world more volatile, more uncertain,” he added.

Former governor of the Bank of England Mark Carney painted one of the more stark portraits. .