An overhaul of banking regulation is needed in the wake of the global financial crisis, and one of its aims should be to insulate the real economy from the effects of future banking crises, according to some of the world’s top economists.

They said a new regulatory framework, setting out the principles for future governance of the banking system, would require broad global agreement. It may also need to include restrictions on the activities of commercial banks to discourage them from excessive indulgence in financial innovation.