Policymakers around the world must be ready to take more action to avoid future financial turmoil, the Bank of England's deputy governor Sir John Gieve has said.
Although measures by countries around the world prevented a "complete seizure" of the banking system, advanced economies were only in the "early stages" of a recession, he warned.
Sir John called for closer international co-operation to deal with crises and firmer ground rules to tackle the fall-out from failing global banks such as Lehman Brothers, which triggered the turmoil in September.
In a speech to the European Business School, he said: "The extraordinary measures we have taken in this country and others are having a positive impact but we may need to do more."
He said new regulations were needed to govern banks' liquidity requirements as well as putting the onus on banks to build up resources in the good times to see them through the bad times.
This would prevent shell-shocked banks from cutting lending in tougher climates and hastening a slowdown, he said.
Other proposals could include making it more expensive for banks to expand their balance sheets at a rapid rate when confidence is high, Sir John said
"We must be ready to take further action if required whether monetary, fiscal, or directly in the financial sector," he added.
