Financial stability is at risk as central banks draw back from ultra-easy policies that have flooded the world with cash, because emerging markets lack defences to prevent potentially huge capital outflows, officials were warned over the weekend.

Central bankers devoted some at their annual Jackson Hole policy retreat to the threats posed by global liquidity.

They heard two academic papers on the challenges, sparking a debate on actions and on coordination.

Bank of Japan Governor Haruhiko Kuroda told the audience, which included top officials from advanced as well as emerging economies, that the bold measures he had championed to spur his nation's moribund economy were bearing fruit. 

"The bank's (policy) has already started to exert its intended effects," Kuroda said.

The Bank of Japan has embarked on an aggressive bond-buying campaign to lift inflation in his country to 2%.

Easy money policies used to depress interest rates in Japan, Europe and the US had sparked a flood of capital into emerging markets as investors sought higher returns.

Now, however, the US Federal Reserve has said it plans to reduce its bond-buying stimulus by year end, with an eye toward drawing it to a close by the middle of 2014.

Federal Reserve Bank of Atlanta President Dennis Lockhart made clear that tapering could begin next month, provided the economic news between now and then was not dramatically bad.

Concerns over Fed tapering has sparked an exodus of cash from emerging markets, including India and Brazil, whose currencies and stock markets suffered steep losses this week.

"Amplifications, feedback loops and sensitivity to risk perceptions will complicate the task of exit and necessitate very close and constant dialogue and cooperation between central banks," Jean-Pierre Landau, a former deputy governor of the Bank of France, warned in his presentation.

There was also discussion about the need for emerging market nations to develop tools to control credit flows. Without such tools, these countries could lose the ability to control domestic financial conditions with monetary policy.