09/17/2011 09:32 EDT | Updated 11/17/2011 05:12 EST

Flaherty sounds warning on Europe debt crisis

Finance Minister Jim Flaherty says world leaders will continue to push Europe to tackle its debt crisis in order to prevent a ripple effect on economies around the globe.

"It's imperative that the Europeans deal with the sovereign debt situation, and deal with their banking situation, make sure that banks are adequately capitalized. Otherwise we run the risk of a large shock emanating from Europe," Flaherty said in an interview with CBC Radio's The House, broadcast on Saturday.

"Large shocks are not good for the global economy, and we're part of the global economy, and it could stymie growth," he said as MPs prepare to head back to Parliament on Monday morning.

Despite the worry over what analysts are calling a contagion to the global banking system, Flaherty said he still expects Canada to record modest economic growth this year and into 2012.

He also said he would not rule out another round of economic stimulus in Canada if there were to be "a shock from outside."

Officials with the International Monetary Fund and World Bank will be meeting in Washington for three days, starting next Friday to discuss the latest developments. G20 finance ministers will meet in the U.S. capital on Thursday