Trichet is concerned that existing mechanisms are hampering recovery at a time when the recession is putting great pressure on the financial system.
He said: “Our ultimate objective must be to extend the regulatory net to cover all financial instruments, institutions and markets that are either systemically important or that play a key role in the functioning of markets.
“Hedge funds and credit rating agencies must be at the centre of the debate.”
He added: “In Europe, the ongoing discussions about proposed regulatory initiatives to establish a harmonised framework for credit rating agencies and on assessing possible initiatives for hedge funds are important.”
Trichet said a step in the right direction is the proposed European framework for the registration and oversight of rating agencies, with an important role for the Committee of European Securities Supervisors and the Committee of European Banking Supervisors.
He announced his proposals at a recent meeting between the leaders of the UK, France, Germany, Italy, Spain and the Netherlands in Berlin ahead of the G20 economic summit to be held in London on April 2.