Banks risk becoming addicted to cheap central bank cash used to fight the financial crisis and must prepare for its eventual withdrawal, the head of the ECB warned at a Frankfurt banking conference on Friday.

Financiers from the head of Deutsche Bank to the President of Germany's Bundesbank urged bankers and regulators to learn the lessons of the global financial crisis and drive through changes to prevent future breakdowns.

European Central Bank policymakers met on Thursday for mid-month discussions ahead of a decision about exit strategy due at their December 3 policy meeting.

Emergency treatment and strong medicines are sometimes necessary. But, if their use is prolonged, they can lead to dependence and even addiction, ECB President Jean-Claude Trichet told a Euro Finance Week event.

Eventually, the administration of painkillers must be stopped if patients are to get back on their own two feet, he said, also warning that the ECB would have to whip away support promptly and unequivocally, if inflation flared.

Bundesbank President Axel Weber said regulators must be resolute about pressing ahead with reform and reject criticism for perceived over-regulation as markets start recovering.

We don't give a damn what anyone says, because we will just implement it, he told the conference. It is very important for us not to fall prey to influences on the way up or down.

We have to turn very stubborn ... and make the system more resilient, said Weber, who also sits on the European Central Bank's policymaking Governing Council.

The worst financial crisis in 80 years has sparked calls for a radical overhaul of banking supervision, which is still country-based despite cross-border groups dominating the sector.

Politicians, shareholders and regulators have sought someone to blame for the breakdown that led governments to pour colossal public funds into stimulus packages and bank bailouts.

Much of the criticism has been focused at bankers.

Deutsche Bank Chief Executive Josef Ackermann told the same conference that all parties need to learn from the crisis to help prevent future financial bubbles.

We do not seem to have made much progress identifying financial bubbles since the Dutch tulip crisis, Ackermann said, referring to the 17th century Dutch craze.

BLAME GAME

Momentum has been building in the United States to break up lenders that are not only too big to fail but which may be too big to save. But others, including Ackermann, have stressed that there is still a role for large banks.

The goal of shrinking firms is to prevent another debacle like the collapse of Lehman Brothers and the huge taxpayer bailouts of AIG and Citigroup in the United States as well as Hypo Real Estate , Royal Bank of Scotland and ABN Amro in Europe.

Banks have also faced public anger for paying eye-popping bonuses amid a crisis that has required billions of euros in taxpayer money for bailouts.

Ackermann, who has backed the creation of an international bailout fund, said the state would have to be involved in such a fund because the resources required were so great.

His remarks stood in contrast to comments by European Central Bank executive board member Juergen Stark who said this week an emergency fund for banks, funded or part-funded by the state, would merely increase the threat of moral hazard.

Weber cautioned that learning the lessons of the crisis will not guarantee future crises can be averted, but it will help cope with them better.

We cannot prevent and predict the next crisis. We have to make sure when the next crisis comes, and it will come with a 100 percent probability at some time, that the system then is more resilient and that's what systemic supervision is about, he said.

(Writing by Marc Jones and Maria Sheahan; Editing by Mike Peacock)

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