VIENNA (AFP) - Banks should use profits generated recently to enhance their shock buffers, as the overstretched state is likely to be less willing to help them in case of further stress, a top regulator said on Friday. Public sector finances have been stretched and must be consolidated. There is no public sector appetite to engage in the types of banking sector support measures of the past three years, said Nout Wellink, who is chairman of the Basel Committee on Banking Supervision. Banks therefore must use their return to profitability which is due in part to public sector support to boost capital and liquidity buffers, he said. Significant risks remain in the economy and the financial system, and it would be unacceptable if banks did not use this opportunity to bolster their resilience to future shocks, added Wellink, who also heads the Dutch central bank. After two dismal years in the financial crisis when massive losses were reported by many top international banks, state bail-out packages have helped to return these ailing banks to profitability. Wellink pointed out however that while they are now making money again, many banks have not done enough to rebuild their capital buffers to support new lending activity. Meanwhile, Germanys central bank boosted its growth forecast on Friday for this year and next as Europes biggest economy cashes in on the gradual global recovery. The Bundesbank said in its twice annual outlook that it expected German gross domestic product (GDP) to expand 1.9 percent in 2010, versus the 1.6 percent it had predicted in December. Next year, the economy is seen as growing 1.4 percent, against the 1.2 percent previously tabled. The main drivers will initially be exports and stimuli from the inventory cycle, whereas the importance of government stabilisation measures will gradually wane, the Bundesbank said, referring to stimulus efforts taken last year to fight Germanys worst recession since World War II. In the medium term, business investment will pick up, and private consumption, too, is likely to increase again. The Bundesbank said that it saw the risk to German economic growth posed by fears over other eurozone countries defaulting on loans as limited. However, this depends on credible measures being taken to achieve sustained fiscal consolidation, it said. Apart from that, it is conceivable that the German economy could benefit from the global recovery to a greater extent than is assumed here. The German government has forecast 1.4 percent growth this year and 1.6 percent in 2011. The Bundesbank said the country could see a slight uptick in unemployment in the next two years but noted that the German job market had weathered the economic crisis well. The official unemployment figure in 2011 could be 3.4 million, which is equivalent to an unemployment rate of 8.0 percent, it said. German joblessness in May fell to 7.7 percent of the workforce. On inflation, the central bank said that higher oil prices and the depreciation of the euro could cause a moderate rise in consumer prices of 1.2 percent in 2010 and 1.6 percent in 2011.