The Bank for International Settlements warned that economic recovery is at risk of a relapse if governments do not move fast to wind down crisis stimulus programmes.
In its annual report, the global central bank body called for "immediate" steps to cut budget deficits and debt accumulation in "several industrial countries", which were not named.
The BIS said the crisis had left a "daunting legacy" especially in industralised nations, where the recovery was still fragile and uneven.
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However, while support measures had prevented the worse by stifling contagion, they sapped confidence by delaying "much needed adjustments in the real economy and financial sector," it added.
"The combination of remaining vulnerabilities in the financial system and the side effects of ongoing intensive care threaten to send the patient into relapse and to undermine reform efforts," the report underlined.
"Macroeconomic support has its limits," it added.
The BIS said recent reaction of financial markets showed that those limits had been reached in several countries.
The general manager of the BIS, Jaime Caruana, told journalists: "Global growth can no longer be sustained by fiscal expansion in the advanced world."
The 206 page annual report was released a day after leaders of the world's 20 leading economies finished a two-day meeting with a commitment to at least halve deficits by 2013 and stabilise or reduce government debts by 2016.
Caruana highlighted three policy challenges for the world economy: cutting deficits, improving balance sheets in the financial services industry and finalising strengthened financial regulation.
"The first and immediate challenge is to make a convincing start to reducing budget deficits in the advanced economies," he said.
"We cannot wait for the resumption of strong growth to begin the process of policy correction."
The BIS chief said delays in starting the shift "would only risk renewed financial volatility, market disruptions and funding stress."
Caruana followed the G20 in acknowledging that specific policy measures would vary according to the circumstances in each country, since the scale of fiscal problems varied.
But he underlined that structural budget deficits in advanced economies were "just too high"
Meanwhile, countries with persistent surpluses should also move towards balance, Caruana said as the BIS urged emerging nations such as China to move towards more flexible exchange rates.
The second challenge, Caruana added, was continuing to get banks to bolster their finances and to foster "behavioural changes in the financial industry."
If state support to banking prompted by the crisis went on too long, it would insulate the industry from risks, he underlined.
The BIS report reiterated the need for more effective regulation of financial services to provide "more stable foundations" for growth.
It also warned that banking industry was highly exposed to the deteriorating commercial property market.
Through last year central bankers were earnestly looking for the signals for the right moment for governments to unwind spending programmes that were implemented to dampen the crisis and stimulate a recovery.
Despite low inflation and the fragile economy, the BIS also hinted on Monday at a broader shift in monetary policy towards interest rate hikes.
"It is important to bear in mind that keeping interest rates near zero for too long, with abundant liquidity, leads to distortions and creates risk for financial and monetary stability," the report said.
The BIS groups more than 54 major central banks.
