Europe learned its lessons after the financial crisis and is now in a strong position to weather further stress in its banking system, several economists and policymakers say.

A central theme at the Ambrosetti Forum in Italy on Thursday and Friday was the potential for further instability in financial markets, arising from problems in the banking sector — particularly against a backdrop of tightening financial conditions.

The collapse of U.S.-based Silicon Valley Bank and of several other regional lenders in early March prompted fears of contagion, furthered by the emergency rescue of Credit Suisse by Swiss rival UBS.

Policymakers on both sides of the Atlantic took decisive action and pledged further support if needed. Markets have staged something of a recovery this week.

Valerio De Molli, managing partner and CEO of The European House – Ambrosetti, told CNBC on the sidelines of the event on Thursday that “uncertainty and anxiety” would continue to plague markets this year.

“The more worrying factor is uncertainty in the banking industry, not so much about Europe — the ECB (European Central Bank) has done incredibly well, the European Commission also — the euro zone is stable and sound and profitable, also, but what could happen particularly in the United States is a mystery,” De Molli told CNBC’s Steve Sedgwick.

De Molli suggested that the collapse of SVB would likely be “the first of a series” of bank failures. However, he contended that “the lessons learned at a global level, but in Europe in particular” had enabled the euro zone to shore up the “financial robustness and stability” of its banking system, rendering a repeat of the 2008 financial crisis “impossible.”

The emphasis on “lessons learned” in Europe was echoed by George Papaconstantinou — professor and dean at the European University Institute and former Greek finance minister — who also expressed concerns about the U.S.

“We learned about the need to have fiscal and monetary policy working together, we learned that you need to be ahead of the markets and not five seconds behind, always, we learned about speed of response and the need for overwhelming response sometimes, so all of this is good,” Papaconstantinou told CNBC on Friday.

He added that the developments of SVB and Credit Suisse were down to “failures in risk management,” and, in the case of SVB, also owed to “policy failures in the U.S.”

He particularly cited former President Donald Trump’s raising of the threshold under which banks must undergo stress tests from $50 billion to $250 billion. This adjustment to the post-crisis Dodd-Frank legislation effectively meant that the fallen lender was not subject to a level of scrutiny that might have discovered its troubles earlier. The move of 2018 was part of a broad rollback of banking rules put in place in the aftermath of the crisis.

Although lauding the progress made in Europe, Papaconstantinou emphasized that it is too early to tell whether there is broader weakness in the banking system. He noted that there is no room for complacency from policymakers and regulators, many of whom have promised continued vigilance.

“We are in an environment where interest rates are rising, therefore bond prices are falling, and therefore it is quite likely that banks find themselves with a hole, because they have invested in longer term instruments, and that is a problem,” he said.

“We are in an environment of rising inflation, therefore a lot of the loans that they did on very low interest rates are problematic for them, so it is not a very comfortable environment. It is not an environment where we can sit back and say, ‘okay, this was just two blips, and we can continue as usual’. Not at all.”

‘Two-front war’

Spanish Economy Minister Nadia Calviño on Friday said that banks in Spain have even stronger solvency and liquidity positions than many of their European peers.

“We do not see any signs of stress in the Spanish market, other than the general volatility we see in financial markets these days,” she said, adding that the situation is now “totally different” from what it was in the run up to the European debt crisis in 2012.

“We learnt the lessons of the financial crisis, there’s been deep restructuring in this decade, and they are in a stronger position than in the past, obviously.”

Unenviably, central banks must fight a “two-front war” and simultaneously combat high inflation and instability in the financial sector, noted Gene Frieda, executive vice president and global strategist at Pimco.

“There is now something happening that is outside the Fed’s control in the banking sector, and we all have our views in terms of how bad that gets, but my own sense is that we’re not facing a banking crisis, that there will be some tightening in credit conditions, it will bring a recession forward. It’s not the end of the world, but it’s certainly not discounted in the equity market,” Frieda told CNBC on Friday.

“We’re still fighting inflation, but, at the same time, we’re fighting these uncertainties in the banking sector. All of the central banks will try to distinguish between the two and say, on the one hand, we can use certain policies to deal with the financial instability. On the other hand, we can use interest rates to fight inflation. But those two will get muddied, and I think, inevitably, financial instability will become the one that’s dominant.”