Hong Kong - The head of HSBC bank in Asia Thursday warned of the dangers of "financial nationalism" by banks because of the recent crop of stimulus packages by governments worldwide.

Sandy Flockhart, chief executive officer for the bank's Asia-Pacific banking operations, also warned of bail-out funds being swallowed up by "fringe projects."

Flockhart, speaking at a financial conference in Hong Kong, said he expected global gross domestic product to shrink in 2009 but said the good news was that Asia would be the first region to recover from the crisis.

"While the credit crunch may have started in the US, the United Kingdom and other over-borrowed economies, the effects continue to spread far and wide," he said.

"Indeed, concerns are being raised that those banks which have had to rely on government bail-outs may start showing a home bias in their practices. Such financial nationalism would clearly be a dangerous trend if it catches on, and it likely will."

Flockhart said another problem was the possible sidetracking of government stimulus funds what he said he could only politely describe as "fringe projects."

"In the United States, various officials from various levels of government have been lining up at the trough with wish lists of so-called shovel-ready projects," he said.

"The wish lists (are) for everything from a 500,000-US-dollar dog park with fountains, to an 800,000-dollar-frisby-disc golf course, whatever that is, to 2 million for more neon lights - very eco-friendly - in Las Vegas."

Flockhart nevertheless said that the stimulus packages announced were positive moves and expressed optimism for the Asia region, pointing to the continuing high growth in China and India. (dpa)