The banking crisis sparked by the collapse of three major U.S. lenders in the spring may be out of the headlines, but it’s not over.

The normally staid economists at the Bank for International Settlements, a type of brain trust for the world’s fiat-based monetary system, is not a group prone to employing alarmist language.

Yet officials called for an urgent “change in mindset” among advanced economies now that the limits of Keynesian-style expansion fueled by debt has been exhausted.

“The global economy is at a critical juncture,” said BIS general manager Agustín Carstens told journalists on Sunday during the presentation of its annual report.

A toxic mixture of soaring inflation not seen since at least the 1970s, as well as historically high public and private debt, cannot be sustained for much longer.

Therefore, the BIS noted, concerted action is necessary to repair balance sheets and enact productivity-boosting reforms even as central banks keep lending conditions tight or restrict them further.

“The key challenge is fully taming inflation, and the last mile is typically the hardest,” said Carstens.

Should consumer and producer prices remain higher for longer than anticipated, his institution warned, banks face credit losses in a “similar order of magnitude” as during the 2008 global financial crisis.

At that time two of the five largest investment banks required rescue by larger institutions, Lehman Brothers outright collapsed, while major commercial lenders did not survive. Wachovia was swallowed up by Wells Fargo, and Washington Mutual became the largest bank to ever collapse in U.S. history.

Without referring to failed banks like SVB and First Republic directly by name, the BIS argued even comparatively small institutions can shake confidence in the overall system.

Growth excessively dependent on unsustainable government policies

It’s not just the traditional lending business that remains under pressure: High-risk speculators like hedge funds and family offices could juice returns through heavy borrowing. This so-called shadow banking system lies outside the reach of supervisors like the Federal Reserve and FDIC.

“The sector is rife with hidden leverage and liquidity mismatches, especially in the asset management industry,” the report warned, adding “it has been a source of large losses for banks,” such as Bill Hwang’s failed Archegos fund.

The BIS departmental head responsible for monetary and economic threat assessment and analysis, Claudio Borio, slammed what he called a “growth illusion”—an excessive reliance on pulling various policy levers to generate economic expansion—and testified to a “grim outlook for government debt.”

This language is unusually frank for policymakers, who tend to couch their analysis and recommendations in more reserved tones when compared with independent economists like Nouriel Roubini.

Based in Basel, Switzerland, the BIS is often called the central banker’s central bank, but not because it acts as some sort of lender of last resort to institutions like the Federal Reserve—the Fed can print as much money as it deems prudent.

Rather it serves as a watchful guardian over the financial system. It drafts regulatory regimes like Basel III that set minimum thresholds for bank solvency and liquidity requirements as well as monitors risks to the overall system.

The institution’s board is staffed mainly by a who’s who of central bankers. Carstens himself is a former deputy managing director of the International Monetary Fund, finance minister of Mexico, and governor of the country’s central bank who took on his current role at the end of 2017.

This story was originally featured on Fortune.com

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