n and oversight over financial markets whose excessive freedoms have caused "not a normal crisis but the end of an era." The Hungarian-born financier and philanthropist commanded center stage at the World Economic Forum with a dire analysis of recent days' market turmoil and a call for the creation of a "new sheriff" for global finance -- details to be worked out later.
It was a stark and jarring message coming from one of the richest businessmen in the world -- albeit one who is no stranger to controversy and politics and has seemed to pride himself on being a maverick.
"Authorities are working with the wrong paradigm," Soros told journalists at the annual gathering of the world's political, business and academic elite in the Swiss ski resort of Davos.
This year's event coincided with a sharp plunge in global stock markets. The development surprised few, given the deepening crisis sparked last year by the mass defaults in U.S. mortgages. But it cast an unfamiliar gloom over a gathering which in recent years had veered closer to triumphalism over globalization and economic growth.
With such ominous questions hanging in the Alpine air, and legions of media on hand, the stage was set for a business celebrity with radical answers.
Soros said it was a mistake to believe that markets will largely regulate themselves. "Financial markets don't tend toward equilibrium -- It's a misconception."
"Authorities ought to go in and examine the books" of financial institutions, Soros said -- and provide assurance that "they will rescue and even take over banks that become insolvent."
One participant asked: Might such willingness to effectively nationalize major institutions not spark further panic and only deepen the crisis? "It could be dangerous," Soros conceded. Soros blamed the U.S. Federal Reserve for keeping interest rates too low for too long. Alan Greenspan, the former chairman of the U.S. central bank, "will not look good in retrospect," he said, adding that successor Ben Bernanke also bore some of the blame since "the Fed has been somewhat asleep at the wheel."
The low interest rates fuelled a decade-long U.S. housing boom whose apparent bursting during the past year has reverberated around the globe -- and revealed banks the world over as vulnerable to investment vehicles of seemingly unfathomable complexity.
"It became a free-for-all," Soros said. "Credit extension went so far that I don't think it can go any further." One unhealthy result: "The appreciation of houses replaced traditional savings.
"Things are now coming home to roost," he said.
Soros predicted a realignment of power and wealth -- as "recession in the developed world" would be met by a "countertrend in the developing world."
Soros, 77, said "old fogies like me" saw the crisis coming and even expected it earlier. But ever the hedger of bets, he added: "It is possible that I'm exaggerating the dangers. I've done it before."
Soros, of Jewish descent, emigrated to Britain as a youth after surviving the Nazi occupation of his country and later moved to the United States, becoming an enormously successful investor and financial speculator.
In recent years he has focused on encouraging democracy in emerging nations, and he has also been active politically in the United States, casting his support this year for Democratic presidential candidate Barack Obama, whom he described as the clearest messenger of change.
