The 'nascent signs' of economic recovery notwithstanding, the International Monetary Fund on Wednesday warned that there are significant risks of the crisis recurring, as long as global banking system remains strained.
Boosted by unprecedented policy measures including massive stimulus packages from different countries, the global economy is seeing signs of tentative turnaround even as the revival is expected to be slow.
"Systemic risks have been substantially reduced following unprecedented policy actions and nascent signs of improvement in the real economy," the multilateral lending agency said.
It also asserted that the immediate outlook for the financial system has improved markedly in recent months.
However, IMF noted that the "risk of re-intensification of the adverse feedback loop between the real and financial sectors remains significant as long as banks remain under strain and households and financial institutions need to reduce leverage".
In its latest global financial stability report, the lender cautioned the global community against complacency and urged policy makers to promptly come up with a future regulatory framework to foster sustained economic growth. Pointing out that 'complacency' could become a risk, IMF said that problems in the banking system could go unresolved and the "much-needed regulatory reforms may be delayed or diluted".
"Policymakers should promptly provide a plan for the future regulatory framework that mitigates the build up of systemic risks, grounds expectations and underpins confidence, thereby contributing to sustained economic growth," the report noted.
According to the global lender, financial markets have rebounded and risks in the emerging markets have eased. However, IMF said that credit channels are "still impaired and the economic recovery is likely to be slow".
Fighting one of the worst financial meltdowns in decades, many economies worldwide have pumped in billions of dollars and are also aiming to reform the global financial system.
"Deeper financial reform and the resolution of weak banks will be needed before authorities in many jurisdictions can fully exit from liquidity and funding provision," the report added.
Further, IMF stressed the need for policymakers worldwide to consider and decide on the sequence of unwinding all the "unconventional policies undertaken".
"Great care in disengaging from public support will be necessary to avoid either sparking a secondary crisis through premature withdrawal or endangering monetary and fiscal credibility through belated exit," the lender said.
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