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OTTAWA - With the credit crisis showing signs of easing, Bank of Canada governor Mark Carney used his first major address in New York to call for new regulations that would avert a repeat of the financial catastrophe.

The rookie central bank governor did not declare the global credit crisis brought on by last summer's subprime meltdown over, but he told a business audience that market turbulence had eased "in recent weeks."

That may not have been news to the New York financial community, but Carney had come to deliver a stern message to the community whose lax lending practices over the past several years had led to last summer's subprime mortgage meltdown.

Saying a repeat cycle of easy money and risky financing must not be allowed to re-occur, Carney said ways should be found to ensure that central banks or governments have the means to reign in the private banks and market players.

"It is important that we not let a sense of complacency distract us from learning the appropriate lessons, and acting accordingly, once the game begins again," he said, using a baseball analogy.

Carney did not give specifics of what instruments or new regulations would be needed, and he pointed out finding an appropriate solution that could be co-ordinated across jurisdictions will be complicated.

But he stressed that it makes no sense for central banks to have worked so diligently at restoring confidence in financial markets if they do not seek the means of preventing the cycle from repeating.

Economists have been split about the necessity of government regulations to encourage more cautious practices, and both Carney and his predecessor David Dodge have said in the past that the market was capable of disciplining itself.

TD Bank chief economist Don Drummond said the question is not whether new regulatory approaches are warranted, but whether they can strike the right balance.

"The principles the governor outlined suggest that he is on the right track," Drummond said in an e-mail.

"I especially appreciate his recognition of the need to address how the Bank of Canada might support liquidity on an ongoing basis and to contemplate, in advance, what the Bank should do in extraordinary circumstances, such as have been encountered for almost the past year."

Carney said central banks around the world, including Canada, have succeeded in recent months in injecting hundreds of billions of dollars in liquidity to ensure that financial markets continued to function.

The Bank of Canada has made $4 billion available to the chartered banks through purchase and resale agreement auctions.

"In Canada, spreads indicative of bank funding costs have fallen markedly over the last few weeks, and are substantially below equivalent spreads in some other currencies," he said of the impact of the bank's actions.

But he noted that what led to the crisis was not insufficient liquidity but too much of it, encouraging financial institutions to engage in riskier and riskier loan practices in an effort to maximize returns.

It was time to plan for the next round of easy money conditions, Carney warned, adding that policy makers currently have few tools at their disposal to soak up excess liquidity and encourage responsible, prudent lending practices.

Last month's adoption of the Financial Stability Forum recommendations by advanced economies to increase bank asset disclosure will help, he said, but more may be needed to give central banks or governments greater ability to reign in private lenders.

"Central banks and other authorities should be as concerned about the distortions and inefficiencies created by overly easy financing conditions, rapid credit growth, and excess confidence about future market liquidity as those created by a lack of liquidity," he said.

"In my opinion, it is worthwhile for policy-makers to consider the promotion of macro-prudential regulations that could serve to restrain pro-cyclical liquidity creation among banks and market makers when appropriate."

Carney's call on Thursday is not related to a bill in the House of Commons that would give the bank governor greater powers to make loans to chartered banks.