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(Click DAVOS for more on the World Economic Forum.)

(Bloomberg) -- Deutsche Bank AG co-Chief Executive Officer Anshu Jain’s biggest worry this year? Unexpected aftershocks when the Federal Reserve starts tightening, especially in the corporate bond market.

“A disruptive credit event following a Fed turn would be at the top of my worry list,” Jain said at a panel discussion at the World Economic Forum in Davos, Switzerland on Wednesday. “Sometime in the next six, max 12 months, we are going to get that Fed turn. That’s going to be very significant.”

Jain stressed that his concern didn’t mean he was necessarily predicting a crisis, and he endorsed a return to normal monetary policies. He and his fellow panelists, which included Bank of America Corp. CEO Brian Moynihan and HSBC Holdings Plc Chairman Douglas Flint, warned against over- reliance on unconventional measures such as quantitative easing.

“People shouldn’t be surprised that central banks will make adjustments to normal, at a pace that may surprise them, because of the fear that if they don’t start moving to normal we’ll never get there,” Moynihan said. If the Fed raises interest rates because the U.S. economy is growing strongly, “that is good news,” he said.

Fed Chair Janet Yellen indicated in December that rates are unlikely to rise “for at least the next couple of meetings,” or not before late April. Federal funds futures markets show a 15 percent chance the benchmark interest rate will be 0.5 percent or higher in June.

The banking executives attending Davos also cautioned that because of stricter regulations, financial institutions can’t provide the liquidity they once did, buying assets on the market to act as shock absorbers.

“I’m relatively comfortable that if there is a huge unwind of the Treasury carry trade, there are ways of working our way out of it,” Jain said. “If the same thing were to happen in investment-grade credit, or worse still, high-yield or leveraged loans, where there has been a desperate search for yield now for multiple years, that would be at the forefront of my concerns.”

--With assistance from Richard Partington in London.

To contact the reporter on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net Keith Campbell, Steve Bailey

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