THE prospect of the United Kingdom leaving the European Union represents another risk that central banks around the world now have to contend with, even as they work together to guide a fragile global economic recovery.
Terming Friday's results of a UK referendum that favoured a UK-EU split, or "Brexit", as an "additional adjustment", Jaime Caruana, general manager of the Bank for International Settlements (BIS), said on Sunday: "The world economy conveys a sense of unfinished adjustment and fragile confidence."
"There is a need to rebalance policies in order to shift to more robust and sustainable growth and address accumulated vulnerabilities," he added.
But even as central banks grapple with fragile growth, they are working together to ensure that negotiations to formalise Brexit will not shake global markets further.
"With good cooperation at the global level, I am confident that uncertainty can be contained and that adjustments will proceed as smoothly as possible," said Mr Caruana.
Mr Caruana was speaking at the bank's annual general meeting in Basel, Switzerland, where it launched its 86th annual report.
In the report, the "bank for central banks" pressed for the need for prudential, fiscal and structural policies to work with monetary policy so as to safeguard global growth in the face of growing risks.
The report identified three underlying sources of risk for the global economy that threaten global economic growth.
The first is rising debt levels, which have reached levels that threaten to destabilise economies should there be another shock.
Next would be low productivity growth, which has resulted in financial resources channelling into expanding but low-productivity sectors like construction, said Mr Caruana. "Once the bust occurs, it takes time for these misallocated resources to shift back to more productive uses."
The third would be the shrinking manoeuvring space for policy responses, as monetary policy has been accommodative even as room for manoeuvring shrank.
Stressing the important role that central banks have to play in stabilising global recovery, Mr Caruana also called for policymakers from other sectors to make clear their responsibilities in guiding global growth.
"An institutional framework that clearly delineates their (central banks') responsibilities from those of other policymakers is key," said Mr Caruana.
"Monetary policy needs to work alongside prudential, fiscal and structural policies as part of the rebalancing we are calling for today."
The BIS's financial results, which were also published in the annual report, included a balance sheet total of SDR 231.4 billion (US$326.1 billion) at end-March 2016 and a net profit of SDR 412.9 million.
Its balance sheet in 2015 was at SDR 216.8 billion, and it recorded a net profit of SDR 542.9 million.