Financial derivatives - often seen as a big contributory factor to the global financial crisis -- were the target of fierce condemnation at the World Economic Forum on Wednesday.
The securities, which derive their value from the performance of another, were seen as a key reason why risk still remains in the global financial system. Paul Singer, CEO and co-chief investment officer at hedge fund Elliott Management, said that the leverage in the system - especially in derivatives - has to been meaningfully reduced.
"I don't believe (markets) are safer. I don't believe they are safe," Singer said at the panel discussion in Davos - chaired by Martin Wolf from the Financial Times.
Wolf added that only relatively modest improvements in metrics did not mean that markets were any safer or immune from another crisis. He added that leverage, using these derivatives, was higher at some institutions that it was before 2008.
Singer added that he "loved" trading derivatives but that they were a "net negative" to society. He added that if derivatives traded by institutions were correctly priced - even those traded by sovereigns - then the system would be safe.
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Anat Admati, professor of Finance and Economics at Stanford Graduate School of Business agreed, adding that derivative risk was still a problem in the system that needed to be solved.
"The risk is all over and there is too much collateral damage," she said.
She said counter-productive laws and ineffective regulators had failed to alleviate risk in the financial world.
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"When you look closely, you are going to discover that these reforms are essentially just tweaks," she said.
Two banking executives on the panel defended the use of derivatives but conceded that banks still needed to conclude the progress in making the financial world safer.
Antony Jenkins, the group chief executive at Barclays, added that he believes that new regulations and rules needed a systemic approach which should include other sectors like insurance and shadow banking.
He said that the failures of U.K. institutions like Northern Rock and HBOS meant that the problems in the world of banking shouldn't be confined to derivatives. Rather, it's the interconnectivity of the system that makes it much more systemic, he said.
"Derivatives provide a socially useful purpose," he said. He added that they give people a way of protecting and hedging their investments.
Instead of focusing on deviates, Jenkins said that regulators needed to "get into the animal spirits" of these people running these businesses with high leverage.
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They need to box in the animal spirits through profound change, Jenkins said.
Douglas Flint, group chairman at HSBC Holdings believes that derivatives - when traded correctly by financial institutions provide a proper framework for risk and more problems would exist if that risk was traded outside of the system.
"I believe (markets) are safer," he said. "(It) would be a shocking indictment to the industry if after six years that they aren't safer."
By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81
