HAMBURG (Reuters) - The upcoming transition of power in the U.S. government poses risks to the world economy because its most important player could enact policy changes, German Finance Minister Wolfgang Schaeuble said on Monday.


"That means there is a certain potential of uncertainty for future economic developments," Schaeuble told reporters after a meeting of Germany's Stability Council, a joint body that includes state and federal finance officials.


Republican Donald Trump, who is due to take office on Jan. 20, has already signaled plans to cancel a U.S. free trade agreement with Asia, and has expressed scepticism about a similar deal being negotiated between the United States and Europe.


Asked about Italy's bank troubles, Schaeuble said Germany was monitoring the situation closely, but he had great confidence in European bank oversight.


(Reporting by Matthias Sobolewski; Writing by Andrea Shalal; Editing by Michelle Martin)