Shareholders should be able to have more confidence in financial watchdogs in the future, one industry group has said.
Investors should be protected by better financial regulation over the years to come, an industry group has said.
The Investment Management Association (IMA) said that world leaders need to work to agree on a strengthened regulatory framework at the upcoming G20 meeting, to be held next month in London.
Prior to the onset of the credit crunch in 2007, watchdogs including the UK's Financial Services Authority were widely seen to be pursuing a light-touch approach to financial services firms. In turn, this was blamed on allowing banks to pursue risky business strategies and buying large amounts of complex financial instruments linked to mortgages.
When house prices in the US sub-prime market fell sharply in summer 2007, many of these instruments lost value - leading to a global loss of confidence in the banking system and a credit crunch. This in turn has pitched global economies into what looks likely to become a recession of near-unprecedented severity, with the head of the IMF predicting earlier this month that global growth will go "below zero" in 2009.
Commenting on the upcoming G20 meeting, Richard Saunders, chief executive of IMA, said: "While the immediate focus will be on a coherent approach to the present crisis, it is not too early to consider a new regulatory framework.
"Regulation has served the investment management industry well over the years, and we would encourage the G20 to focus on initiatives that will improve investor protection and financial stability in the longer term across the entire financial services sector."
Last weekend, G20 finance ministers met in Sussex ahead of the main leaders' meeting, with future financial regulation also near the top of the summit's agenda.
