Central banks' role shifting to rehab, Chu says

By Jane Sutton

NAPLES, Fla., Nov 2 (Reuters) - The role of the world's central bankers has expanded from squelching the economic party to seeing the patient through rehab after he has partied too hard, a Hong Kong central banker said on Monday.

At a conference of global financial leaders, Francis S.C. Chu, executive director of reserves management for the Hong Kong Monetary Authority, expanded on former U.S. fed Chairman Alan Greenspan's famous quip that the job of the Federal Reserve was to take away the punch bowl just when the party is getting started.

Chu compared the central banks to doctors treating a patient -- the world financial market -- who has suffered a major stroke.

"The patient is up and living, maybe having a few smokes and drinks even," Chu said. "The question is, is the patient strong enough to be on his own?

"If the recovery is really weak, really feeble ... maybe the patient has to change lifestyles, no smoking, no more drinking, no fooling around."

Central bankers, he said, must now force the patient to break his bad habits in order to prevent an economic relapse, Chu told the conference in Florida sponsored by the CME Group derivatives market.

"Let's face it, this is a rehab center now," Chu said. (Reporting by Jane Sutton; editing by Andre Grenon)