Dennis Nally, chairman of PricewaterhouseCoopers International LLP, listens during a panel discussion on day one of the 2010 World Economic Forum (WEF) annual meeting in Davos, Switzerland, on Wednesday, Jan. 27, 2010. [CFP]

Dennis Nally, Global Chairman of PricewaterhouseCoopers, believed that overregulation and protectionism can only do harm to the recovering global economy.

Nally told Xinhua Wednesday during an interview on the sidelines of the forum that CEOs from around the world are concerned with overregulation of financial systems that "could somehow restrict our ability to invest" and with protectionist policies that restrict free trade.

"We're in a period today which I think is better than a year ago, but no one is saying that we're out of the woods yet," Nally said.

Nobody disagrees with the fundamental belief that governments need to improve their regulation of financial systems, he added. But, he continued, there is the complex question of how to make the improvements.

"We need to fix the right types of changes ... and we should not overreact or rush to short-term actions that may sound good or may grab headlines but quite frankly would not serve the fundamental problems all of us need to address," he warned.