Even as global financial markets are set to stage a mild recovery in 2003, there is considerable concern over the possibility of a US war with Iraq and the financial regulators' obsession with publication of quarterly results from companies.

This was the broad message participants conveyed at different sessions on financial markets at the World Economic Forum.

Michael J Johnston, executive vice-president of Capital Group Companies of the US, said he was optimistic about the prospects of a recovery in both the economy and the financial markets.

"Higher-than-expected earnings will likely persuade many investors to return to markets that last year looked overvalued," he said.

Michael Mussa, senior fellow at the Institute for International Economics, said corporate earnings appeared to be recovering and so bond prices were unlikely to rise much further.

While inflation and interest rates would remain low, they were unlikely to translate into further gains in consumer spending.

Mussa also dismissed concerns that the US economy might slip into a Japanese-style deflationary spiral, saying that America's property boom was not nearly as exaggerated as Japan's was.

At a session, focused on building trust in financial markets, Joseph Ackermann, chairman of the group executive committee of Deutsche Bank, said the corporate sector was far too obsessed with quarterly results, a view that echoed management guru, C K Prahalad's earlier tirade against quarterly financial forecasting.

Ackermann said corporate leaders were paid to add value over time and if they focused only on quarterly results, the long-term planning and vision suffered.

"Investors, the media and regulators - all should take a note of this,” he said.

John A Thain, president and co-chief operating officer of Goldman Sachs, said it was time that analysts not just reported financial numbers, but also did long-term analysis.

On the question of the impact of a war in Iraq on the financial markets, Thain said this was only one of the many other uncertainties and a positive resolution of the crisis would remove only one of those uncertainties.