The world should not assume that the financial sector has rebounded for good, despite stock market rallies, the head of the body that oversees global banking regulation said in the Financial Times on Monday.
Jaime Caruana, general manager of the Bank for International Settlements (BIS), warned against complacency after a surge in global stock markets over the last few months.
The profile of the recovery is not clear. Obviously things have improved significantly and the main risks we had at the beginning of the year have to some extent dissipated, he told the British business daily.
But my sentiment would be that we have to be cautious about this improvement, the former governor of Spain's central bank said ahead of the G20 meeting in Pittsburgh on Sept 24-25.
Leaders from the Group of 20 biggest economies are expected to discuss banking sector regulation and the state of the global economy when they meet this week.
In response to politicians' criticism of the pace at which banking regulations are being overhauled Caruana warned against rushing through reforms and dismissed criticism that current rules on bank capital are too soft.
It is very important to realize that we are talking about a higher standard of capital that will happen when the recovery is strong enough, the FT quoted the BIS chief as saying.
We are not trying to interfere with the recovery. The transition is important. But at the same time (we must) not create head winds for the recovery.
(Reporting by Daniel Fineren; Editing by Steve Orlofsky)