PARIS — The European Central Bank is considering taking a bigger regulatory role in the financial sector, ECB President Jean-Claude Trichet said Friday.

Speaking at a Paris conference about the future of capitalism, Trichet said such a move is explicitly allowed under the treaty that paved the way for the bank's creation in 1998.

ECB policy makers are already discussing possible action, he said.

"We will see later at the level of the bank's governing council whether we could be useful in this domain," Trichet said, without elaborating.

The European Union's 1992 Maastricht Treaty says the bank can receive "specific tasks" in supervising financial institutions. Any greater ECB oversight role must originate with a proposal by the EU's executive Commission. It would then need backing of the European Parliament, and unanimous approval by the 27 EU member states, the treaty says.

"It's explicitly foreseen in the treaty, so that's an advantage," Trichet said.

Also Friday, despite swift and large-scale action by central banks and governments to stem worldwide economic turmoil, Trichet cautioned that the global financial system remains fragile.

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"It would be a mistake to underestimate the structural fragility of the present state of global finance and, consequently, of the global economy," he said.

Trichet said that moves by central banks and governments to increase liquidity and recapitalize the financial sector had "proved effective in avoiding a meltdown of global finance."

But he noted the world's financial system needs to be reformed to make it more sustainable in the medium to long term, and to provide more resilience to shocks.

The root cause of the current crisis is "a widespread underestimation of risk in the global financial system, especially in the most advanced countries," Trichet said.

He praised the coordinated response to the crisis by states and central banks. However, he said pursuit of short-term gains and a lack of transparency remain problems for the global financial system.

Trichet called for reforms to compensation and control systems to minimize the short-term incentives that led to excessive risk-taking by financial market actors prior to the crisis.

Other measures, such as requiring banks to hold additional capital and to build up reserves that can be used during downturns, could be adopted to reduce the extreme swings in financial cycles, he said.

Market transparency, particularly of unregulated financial institutions and markets such as hedge funds and private equity, must also be increased, Trichet said.