The global financial system remains as risky as it was before the credit crisis, with the necessary "reboot" of the banking sector delayed by the emergency measures taken to prop up economic growth, the International Monetary Fund has warned.
In its twice-yearly Global Financial Stability Report, published on Tuesday, the IMF argues that despite a blizzard of new regulations the banking system is still vulnerable.
"Although the intentions of policy makers are clear and positive, the reforms have yet to effect a safer set of financial structures, in part because, in some economies and regions, the intervention measures needed to deal with the prolonged crisis are delaying a 'reboot' of the system on to a safer path," the document says.
The IMF was one of the global institutions blamed in the wake of the "great crash" of 2008-09 for exaggerating the benefits of financial globalisation and for failing to issue strong enough warnings about the risks.
In its latest analysis the group finds that the world's banks are just as big and intertwined and just as reliant on short-term wholesale funding (rather than more solid savers' deposits) as they were prior to the financial crash. "Although some countries, notably the US, have reduced their dependence on short-term funding, the bulk of the evidence suggests that the structure of the system has not changed in healthier directions," it reports.
The IMF points out that in many countries, including the UK, troubled banks were swallowed up by their stronger rivals at the height of the crisis, leaving the financial sector even more concentrated than it was before 2008.
"Overall, risks in the financial system remain. Of particular concern are the larger size of financial institutions, the greater concentration and domestic interconnectedness of financial systems, and the continued importance of non-banks in overall intermediation. The potential future use of structured and some new derivative products could add to complexity and a mispricing of risk."
With leading economies, including those of the US, UK and the eurozone, all struggling to generate sustainable economic growth, the IMF is also concerned about the potential side-effects of the ultra-low interest rates and other radical monetary policies central banks on both sides of the Atlantic are using to stave off a deeper downturn.
"If the central bank initiatives are not accompanied by resolute actions to thoroughly restructure the impaired segments of the financial system and solve deep-seated remaining problems in financial institutions they may inhibit adjustments in the structure of banking systems," the IMF says.
The IMF urges global regulators to take a series of further measures, including monitoring "non-banks" such as hedge funds, and encouraging banks to offer simpler financial products.
It would also like to see regulators consider banning banks outright from engaging in certain risky activities – instead of hoping that tougher capital requirements will do the job, by making some areas more expensive and therefore less profitable.
In the UK, where the government is adopting the proposals of the Vickers commission for ring-fencing banks' high-street lending arms to protect savers, the IMF suggests that if banks believe they will no longer be bailed out in any further crisis it could rein in their activities.
But it warns that this benefit "could be mitigated by large banks' funding advantage, economies of scale, and the tendency to concentration".