The world's leading central bankers gathered in Berlin yesterday to face questions from banking conference participants worried about the risk of deflation, a weakening dollar and the fragile US and European economies.

　　US Federal Reserve Chairman Alan Greenspan was expected to join by video link from Washington, while others were scheduled to be there in person: European Central Bank Chairman Wim Duisenberg, Bank of England Head Sir Edward George, Bank of France Governor Jean-Claude Trichet and Toshiro Muto, deputy governor of the Bank of Japan.

　　The privately sponsored conference in a luxury hotel in Berlin came as leaders of industrialized nations sought to reassure financial markets that they were prepared to work together to revive global growth.

　　"Our economies face many challenges. However, major downside risks have receded and the conditions for a recovery are in place," a closing statement from thesgroupsof Eight summit in Evian, France, said. "We are confident in the growth potential of our economies."

　　Duisenberg's scheduled appearance at the conference at Berlin's Adlon Hotel comes just two days before a key interest-rate meeting by the ECB's governing council. Many economists expect the bank to cut rates by as much as a half-percentage point to spur growth in Europe.

　　New economic data have just given the bank more room to cut, with the European Commission saying inflation fell to an annual rate of 1.9 percent in May in the 12 countries that use the shared euro currency.

　　That's below the bank's 2 percent guideline for the first time since June 2002.The bank's main mission is fighting inflation, and it only cuts rates when it can say that prices are under control.

　　While rate cuts can boost growth, they can also worsen inflation if carried out at the wrong time.

　　The euro's recent sharp rise against the US dollar has taken even more upward pressure off prices in Europe, since a stronger currency makes imported goods and raw materials cheaper. The rising euro has also led to fears it will stall growth by making exporters' goods more expensive against foreign competitors, prompting calls from politicians and economists for a rate cut.

　　The bank's leadership has kept the key refinancing rate at 2.5 percent since a quarter-point cut on March 6 even as economists say the case for lower rates has become clearer and clearer.

　　The euro countries showed zero growth in the first quarter, and the International Monetary Fund has warned that Germany, the continent's biggest economy, is at risk of debilitating deflation.