The complexity of the challenges facing Europe's financial system was laid bare in Davos on Friday, as a panel at the World Economic Forum sounded many upbeat notes on the progress of financial regulation but warned that existing quantitative easing policies aren't enough to drive growth.

The panel of leading European bankers and financial officials, convened as part of the WEF in the Swiss Alps to discuss the topic of “Rebooting Europe's Financial Confidence,” addressed a wide range of topics, expressing differing views on tools to boost eurozone economies.

“QE [quantitative easing] is working,” said Benoit Coeure, a member of the European Central Bank's executive board. “We've seen a tremendous improvement in Europe's capital markets... We want to make it work on a continuous basis,” he added.

Axel Weber, chairman of the UBS banking group, however, sounded more cautious, saying: “There may be no limit to what the ECB is willing to do, but there is a limit to what the ECB can and will achieve, and that's the problem.

“The problem is that monetary policy has largely run its course. Any additional amount of marginal easing will have a much lower impact than it had in the past,” he added.

Weber suggested that, going forward, the ECB could either pursue a policy of negative interest rates, or accelerate the rate of expansion in the euro supply, in line with the Japanese model.

Both strategies, however, carried risk, and would become less effective the more they were used, Weber warned.

Recognizing the discord in the room, Francisco Gonzalez, the chairman and CEO of Banco Bilbao Vizcaya Argentina, warned that unity would be a key factor in the success of European efforts to stave off further financial turmoil.

“We need one voice — not many voices,” Gonzalez said. “Europe is going to have a tough ride with low interest rates and low inflation... [the EU] has to move rapidly in terms of governance,” he added.

Such rapid movement would be challenging for many European companies to deal with, Lord Jonathan Hill, commissioner for Financial Stability, Financial Services and Capital Markets Union on the European Commission, told the audience.

Forty different pieces of legislation, brought in to reform Europe's banking system in the wake of the financial crisis, would take time for financial institutions to come to grips with, Hill said.

Hill's comments were echoed by Weber, who revealed that UBS had 40,000 regulatory events with which to contend each year.

Ultimately, systemic and policy changes are required to avoid a repeat of the 2008 financial crisis, the panel concurred.

“Everything we've done since the crisis was about resilience,” Coeure said. “But we have not really changed the structure of our financial system. So the time has come to look at the structure of the system to identify some of the weaknesses that led to the crisis in the first place.

“Now it's time to fix it. It's very difficult and will require deep changes in some national legislation, but it's time to tackle it,” he added.

Other panel members concurred, stressing that an increased role for Europe's capital markets, combined with a willingness to work with international partners and learn from them, were key to the future of European financial regulation.