The chances of a major crisis at a large European bank with operations in several countries cannot be ruled out, according to a Brussels-based banking expert.

Speaking at the Institute of European Affairs in Dublin yesterday, Nicolas Véron, research fellow at the Belgian economics think tank Bruegel, said the failure of banking regulators across Europe to communicate properly with one another could exacerbate a major European banking crisis.

He called for a European-wide regulator to be appointed to monitor the top 15-30 European banks.

During a speech entitled "Is Europe ready for a major banking crisis?", Mr Véron said cross-border regulation was "completely untested" because banks were only accountable to the regulators in their own country and there was not enough co-operation between regulators.

"If there was a major crisis, we would enter into severe co-ordination problems and, as we have seen at Northern Rock, the speed of co-ordination is very important," he said.

Mr Véron said the failure of cross-border banking regulation was seen at German state bank Sachsen LB in August when one of its subsidiaries, Ormond Quay, an off-balance sheet funding vehicle based in Dublin, was no longer able to issue short-term financing in the commercial paper market.

Mr Véron said the Germany system was "not very good at supervising risks in the financial sphere".

"When you put two regulators in charge - one in Ireland and the other in Germany which is not completely up to the task - you have accidents waiting to happen," he said.

He said the Irish regulator had "played by the rules" by pointing out that the responsibility for the problems at Sachsen lay with the German regulator.

Mr Véron said that, following the recent turmoil in the banking sector, trust had been lost in Europe's banking regulators and that banks would have to provide more public information in future.