Stricter regulation, broader regulatory powers and effective global cooperation are needed to ensure financial regulators can manage markets better in the future, markets watchdog the US Securities and Exchange Commission (SEC) warned lawyers in London last week.

Companies and individuals responsible for the recent fall-out should be held accountable by Congress; closer tabs should be kept on hedge funds; and credit ratings agencies – which are funded by the companies they rate – must change their structures, SEC officials and former officials said.

They were speaking from the SEC’s headquarters in Washington DC through a video link at an event organised by the American Bar Association (ABA) and hosted in London by magic circle firm Allen & Overy.

The news came after ABA president Tommy Wells told the Gazette earlier this month that the association was forming a 15-strong presidential task force on financial services regulation, involving ABA members and former SEC commissioners (see [2008] Gazette, 9 October, 2).

Elizabeth Jacobs, deputy director of the SEC’s Office of International Affairs, said global cooperation through the International Organization of Securities Commissions (IOSCO) was crucial. ‘IOSCO gives you an international benchmark,’ she said.

Meyer Eisenberg, former SEC deputy general counsel, said: ‘Congress should make some [companies] responsible, as well as people whose firms have now gone under.’

He said the SEC needed more power because its ‘jurisdiction has been limited’ by Congress. ‘We have $2 trillion worth of hedge funds out there, but we don’t know how many, who they are or what they are doing.’

Marlon Paz, special counsel to the director in the SEC division of trading and markets, said rules are being introduced in an attempt to reduce ratings agencies’ inherent conflicts of interest.