September 08, 2009

Governments urgently need to improve the regulatory framework and supervision of the financial sector, a minister says, as loopholes in the financial services industry led to the global economic crisis.During the G20 meeting that concluded in London last week, Finance Minister Sri Mulyani Indrawati said Monday there should be “significant corrections” to supervision and regulation in the financial sector to avoid the kind of “careless behavior and excessive risk-taking” by those operating in the financial services industry that triggered the economic crisis.

Such behavior has caused governments worldwide to spend taxpayers’ money to bailout failing financial institutions to avoid worsening global economic conditions.“We realize that regulation and supervision of banks and non-bank financial institutions is really important. “Players in the financial industry tend to be one step ahead of regulators supervising them,” she told reporters on Monday.