London: Barclays Plc. chief executive officer (CEO) Jes Staley said the mood at the World Economic Forum (WEF) in Davos reminded him of 2006, when everyone thought they’d solved the riddle of financial crises.

Staley, speaking at a forum in the Swiss Alps on Tuesday, warned against such complacency and said that a combination of stock markets at record highs and volatility near all-time lows wasn’t “sustainable" in the long term. He said companies were too reliant on cheap debt and low interest rates.

“Given asset valuations, given that we’ve got 4% global economic growth it seems we’re in a pretty good place right now economically," Staley said during a panel discussion moderated by Bloomberg’s Tom Keene. “But, we’ve got a monetary policy that’s still in the remnants of the depression era. We’ve got very little capacity in the capital markets to deal with a real move in interest rates."

The International Monetary Fund (IMF) warned on Monday that while the economic outlook for this year and the next was better than previously anticipated, a recession may be closer than many acknowledge. Irrational exuberance in financial markets was one of the causes of the 2008 banking crisis, which led to a global recession.

Harvard University professor Kenneth Rogoff also sees risks and is worried about a potential rebound in inflation-adjusted interest rates. If that was to happen, then countries with weak growth and high debt such as Japan and Italy could suffer, he said on the same panel.

“If interest rates go up even modestly, halfway to their normal level you will see a collapse in the stock market," he said.

Rogoff and Staley were speaking alongside others including Citigroup Inc. CEO Michael Corbat and Carlyle Group LP Co-Chairman David Rubenstein.

Corbat said financial services companies had learned from the last crisis and were more resilient and less complex. Citigroup isn’t an insurance company, or an asset manager, it’s simply a bank, he said. Bloomberg