* Trichet says new bank rules aim at boom-bust cycles

* Most of global economy now out of free-fall

* Central bankers still cautious, prudent on recovery

By Natsuko Waki and Krista Hughes

BASEL, Sept 7 (Reuters) - New global rules for bank oversight should help ease boom-and-bust cycles and prevent the build-up of asset bubbles, top central bankers said on Monday.

European Central Bank President Jean-Claude Trichet, who chaired talks on the global economy at a Bank for International Settlements meeting, said the outlook had brightened but policymakers could not afford to be complacent and would push on with reforms to strengthen the financial system.

Policymakers agreed on proposed new rules for bank oversight late on Sunday, which would force banks to set aside more profits as a cushion against hard times and limit how much debt they take on. [ID:nL6452915] The new rules will potentially limit the role of bank lending in driving economic growth, but also help to prevent the sort of speculative bubbles which sparked the current financial crisis.

"We have to pave the way for drawing all the lessons from what has been observed in the past and to avoid precisely the phenomenon of booms and busts that we have observed," said Trichet, who also heads the oversight group for the Basel Committee on Banking Supervision.