The International Monetary Fund has said that risks to the global financial system have risen since October.
The IMF said the risks have "rotated" into parts of the financial system where they are harder to assess and harder to address - such as shadow banking and life insurance.
It has called on Euro Area governments to tackle non-performing bank loans, which now amount to more than €900 billion. It said they need more efficient legal and institutional systems to deal with the problem.
The IMF said that amidst a moderate and uneven global economic recovery - where inflation rates are too low in many countries - financial stability risks have increased.
Divergent growth and monetary policies - high growth America ending quantitative easing and planning to raise interest rates, while low growth Europe has just started QE - has increased tensions in global financial markets, the IMF said.
This has caused rapid and volatile moves in exchange rates and interest rates over the past six months, it added.
The IMF said this situation is in part due to the legacy of weakened and incomplete repair of balance sheets. It said that risks are rotating - away from banks to shadow banks, from solvency to market liquidity risks, and from advanced economies to emerging markets.
In its latest Global Financial Stability Report, the IMF said there are several key challenges that must be met to ensure global financial stability.
It said the first challenge is the backing up of central bank action in cutting interest rates and starting quantitative easing programmes in Europe with other measures, notably tackling some €900 billion in non-performing loans in the banks to unclog lending channels.
Policymakers should encourage banks to deal with this stock of bad loans and implement more efficient legal and institutional frameworks to speed up this process, the IMF added.
It said US policymakers must concentrate on "getting right" the transition from zero rates and quantitative easing to a more "normalised" situation. A rapid decompression of bond yields could increase volatility with global repercussions.
The second challenge is to limit the financial excesses resulting from accommodative monetary policies, and managing the negative impacts of a prolonged period of low interest rates.
The IMF notes in particular that "weak, European mid-sized life insurers could face rising risks of distress, with almost a quarter of insurers unable to meet their solvency capital requirements if low interest rates were to persist. "
It warns that "with €4.4 trillion in EU assets and high and rising interconnectedness with the wider financial system, these insurers create a source of potential spillovers".
This, the IMF, said is an important illustration of the rotation of risks from banks to non-banks.
It said emerging markets need to increase the resilience of their financial systems by addressing domestic vulnerabilities, if they are to cope with what it calls the "global crosscurrents of lower oil process, rising US policy rates and a stronger dollar.
Debt repayment strains may emerge in Argentina, Brazil, Nigeria and South Africa, the IMF warned. Retrenchment from overinvested industries in China are a domestic risk that could spill over into emerging markets more generally, it added.
Finally, the Fund warned of the ongoing geopolitical tensions in Ukraine, Russia, the Middle East, parts of Africa, as well as risks in Greece.