Officials must avoid incentivising risky behaviour from firms at all cost and clearly specify the mandates of central banks in reform and regulation, said Paul Tucker, a deputy governor of the Bank of England.

Speaking at a crisis management conference in Brussels, Tucker fleshed out the concept of root-and-branch financial sector reforms, introduced by Mervyn King, the Bank's governor, in a speech in Edinburgh last month.

Forcing banks to hold a minimum agreed amount of "truly high-quality