LONDON (AP) – Britain’s financial services watchdog proposed sweeping changes to global banking regulations on Wednesday, including a crackdown on the "shadow banking" activities of institutions like hedge funds.

The government-commissioned banking services report recommends new rules on a wide range of issues from increased requirements on banks on holding capital to stricter controls on bankers’ bonuses to discourage excessive risk taking.

Financial Services Authority chairman Adair Turner said that the market economy remained the best means of delivering global prosperity, but major changes in regulation and supervision were required to ensure that it is focused on the needs of businesses and households rather than taking risks for quick return.

The report embraces actions necessary in Britain and also discusses those that would require international cooperation. Britain will host an April 2 summit of the Group of 20 rich and developing countries that will discuss ways to address the world financial crisis, including more regulation

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