At Davos, Debate on Whether Banks Have Learned Their Lessons DAVOS, Switzerland - Paul Singer, the founder of the hedge fund Elliott Management, said on Wednesday that he remained skeptical that the financial markets were safer despite the changes enacted in the banking industry and by regulators after the financial crisis. As part of a debate on the postcrisis financial system at the World Economic Forum, Mr. Singer said that banks remained highly leveraged and that the buying of debt by central banks had distorted the prices of stocks and bonds. He also said he disagreed with claims that banks "unquestionably understand" the potential risks on their balance sheets. "Many of the world's major financial institutions didn't have a clue about the character and risks of the inventions of their structured desks or other parts of their institutions" before the financial crisis, Mr. Singer said. Douglas Flint, group chairman of the British bank HSBC, was one of two bank executives who argued on Wednesday that the system, more than five years after the crisis, was a much safer environment. Mr. Flint said banks had bolstered their capital, improved their transparency about potential risk and faced more intense regulatory scrutiny. But, he said, reforms need to be made broadly to avoid similar risky behaviors cropping up in other parts of the financial system beyond banking. "If we do not take a systemic approach, we could fight yesterday's war, solve the problem in banking system and find it again another part of financial system," he said. Antony Jenkins, group chief executive of the British bank Barclays, said the system was threatened because financial institutions misunderstood and mispriced risk prior to the financial crisis. "It is this notion that institutions must understand, and price risk much better if we are to have a safer system," Mr. Jenkins said. Much has been done at an institutional level and with regulators to insure risk is viewed through multiple, different prisms.