On Monday, the head of the Australia and New Zealand Banking Group (ANZ), Shane Elliot, warned that the problems various banks in the US and Europe are facing have the “potential” to set off a global financial crisis.

The fallout of the bank failures, and near-failures already seen, are of immense concern to policymakers already, as investors and specific segments of the banking community are seeing their confidence in the sector rattled.

Elliot noted that although the issues facing the US and European banking sectors may now have a negative impact globally, it is still too early to assume the current circumstances will lead to “another GFC [global financial crisis]” such as what triggered the recession of 2008.

Elliot continued, “We shouldn’t be surprised that things like this happen, it’s a crisis for some obviously, but is it a financial crisis? Who knows. Does it have the potential to be one? Yes, it does have the potential.”

Australia’s banking sector is rated by economists as resistant to global volatility, because its banks are highly capitalized with a healthy level of liquidity. Even so, the nation’s regulator has tightened its monitoring and control of the nation’s banks after the collapse of a number of US banks, and the emergency acquisition of Credit Suisse by UBS to avert a failure of Switzerland’s second largest lender.

Elliot was also quick to caution those in the West about being caught up in wishful thinking and assuming there will be a quick recovery, noting, “it’s clearly not over.”

He added, “I don’t think you can sit here and say, ‘Well, that’s all done, Silicon Valley Bank and Credit Suisse and, you know, life will go back to normal’. These things tend to roll through over a long period of time.”