The financial crisis could still worsen and spill into the real economy this year, Germany’s top banking regulator has warned, denying it could have done more to head off the problems encountered by some of the country’s banks.

Jochen Sanio, head of BaFin, the financial services supervisory body, said there was still a risk of “negative feedback” for the financial system if the real economy suffered but there was no sign of liquidity problems at any German bank. “All norms are being met,” he said.