Conditions in global financial markets look potentially “unstable”, suggesting investors need to prepare for a “repricing” of some assets, Jean-Claude Trichet, president of the European Central Bank, said over the weekend in Davos.

The recent explosion of structured financial products and derivatives had made it more difficult for regulators and investors to judge current risks in the financial system, Mr Trichet said. “We are currently seeing elements in global financial markets which are not necessarily stable,” Mr Trichet said, pointing to the “low level of rates, spreads and risk premiums” as factors that could trigger a repricing.