Brexit presents "tremendous opportunities" to set a new regulatory agenda that is dynamic, flexible and protects the global system against another financial crisis, according to the Governor of the Bank of England.
Mark Carney urged global and national regulators to adopt a financial framework that meant the system was resilient enough to withstand another financial shock but based on rules that respected national laws.
He added that policymakers should not be afraid to tweak or reverse regulation that resulted in counterproductive rules.
Speaking ahead of the International Monetary Fund Spring meetings in Washington, Mr Carney also welcomed the Fund's upgrade to UK and global growth but said there remained a "substantial gap between the soft and hard data" that suggested that the global recovery was far from secured.
Mr Carney also signalled that the forthcoming UK general election on June 8 would not weigh on the economy and financial markets in the same way as last year's Brexit vote because businesses, individuals and policymakers were "well prepared" for an election for which there was "overwhelming" support in Parliament.
Mr Carney said that, ten years on from the "financial earthquake" that rocked the world during the crisis, policymakers had created a safety net that had reduced the implicit UK subsidy of the banking system by 90pc since 2008.
He urged policymakers to build on this resilience by working together to create an even stronger financial system.
"We must resist steps that would fragment the global financial system. Instead, we should take full advantage of the progress made by building a system of deference to each other's approaches when they achieve comparable outcomes," he said.
He said Brexit would serve as a "litmus test" for the future of globalisation and international cooperation as he said Britain's decision to leave the EU presented an opportunity to move towards greater recognition instead of a path where "trust and cooperation diminishes" and "trade and innovation are curtailed".
He said: "I would include Brexit as one example of these forces of fragmentation because there are some scenarios where there wouldn't be a cooperative outcome. That said, it is far, far more likely that there is one, and there is a spectrum of positive outcomes here.
"Starting from the same standards of a high degree of regulatory cooperation gives tremendous opportunities. I am more positive about the prospect of continued cooperation and building a more effective system."
Mr Carney also said UK authorities had to move away from an "excessive reliance" on punishing bad behaviour with multi-million pound fines and towards incentivising good behaviour and promoting a "more solid grounding in improved firm culture".
He urged regulators to take a flexible approach towards regulation that recognised the tremendous change seen since the financial crisis.
He said it would be a "miracle" if "everything fit together perfectly, if there no overlaps or duplications, if they were all as effective as we thought they would be in 2008.
"Authorities must learn by doing and make adjustments, as necessary, to optimise our effort, without compromising on the level of resilience the reforms are intended to achieve," he said.
While there was a "much more positive outlook" on the global economy, he added: "There is still a hesitation about actually putting money to work, and the question is what will it take and how are various governments going to translate intention into action. That's understandable given what businesses have lived through over the past decade. So there is more upside to the global economy if we start to see policy uncertainty reduce and that enthusiasm translate into action."