FRANKFURT (AFP) - Forces behind destabilising global flows of money are coming back and Chinas rigid monetary policy is a key source of concern, a top European Central Bank official said on Friday. Mechanisms that fuelled the destabilising financial flows before the crisis are reappearing, executive board member Lorenzo Bini Smaghi told a meeting of The Council for the United States and Italy in Venice. The rigidity of the Chinese monetary regime is slowing down the adjustment of relative competitiveness and the recovery of the developed countries, he said. Emerging economies should tighten their own monetary conditions even if that meant their currencies rose in value on international markets, ECB director said in comments that were released in advance. The fear of letting the exchange rate appreciate, so as not to damage the sector exposed to international competition, leads to an overheating of economic activity that may inflate a bubble not unlike the pre-crisis one in developed countries, Bini Smaghi warned. The risk is that, by maintaining the currency link with the developed countries, the emerging countries import financial instability. The Italian economist also warned that efforts to strengthen financial regulation worldwide was at risk of only partial application. It is unclear what the degree of implementation in countries like the United States will be, he noted.