KPMG Financial Services Chairman Andries Terblanche has warned financial services professionals that fallout from the global financial crisis is far from over.

Speaking at an Australia and New Zealand Institute of Insurance and Finance (ANZIIF) breakfast seminar on Friday, Dr Terblanche said he is confident the world economy will bounce back from the downturn but some risks remain.

He says the interconnected nature of global markets – 77 countries participate freely in the world economy – means some economic shocks could yet surface. Ongoing US mortgage exposure is an example.

Despite its relative resilience to the downturn, Australia remains part of a volatile international system.

“Every country depends on the fortunes and misfortunes of other economies,” Dr Terblanche said. “The maths doesn’t serve that level of interconnectivity.”

He says financial services providers must move to enhance and improve scenario analysis and stress-testing in the wake of the downturn.

“A lot of countries now don’t have the ability to issue another rescue package if something falls over,” he said. “The US has zero chance.”