While conventional wisdom holds that captains of industry and finance almost reflexively oppose government regulation, that’s not always so. Consider a recent survey of 450-some institutional investors, corporate financial heads, pension fund managers, and other execs conducted by Greenwich Associates, LLC. “The results reveal strong – in some cases, surprisingly strong – support for regulatory proposals,” according to Greenwich.

For instance, 63 percent supported a regulation requiring originators to hold a minimum portion of new asset- or mortgage-backed securities, rather than allowing them to sell off entire amounts. Nearly half – 48 percent – favor a regulatory separation of investment and commercial banking activities. Respondents also zeroed in on hedge funds, with 62 percent supporting increased regulatory supervision and control.

To be sure, responses varied by geography and industry sector. Case in point: Nearly half of respondents overall support empowering a government entity to regulate systemic risk and examine firms that could threaten financial stability. Support ranged from 40 percent of respondents in the U.S. to 70 and 68 percent of respondents in the U.K. and Asia, respectively.

Similarly, two-thirds of respondents in the U.S. say the current proposals represent excessive government intervention in the economy. That compares to less than a quarter of European respondents and 28 percent of Canadians. “U.S. respondents think that government is too heavy-handed, but favor new regulations,” observes Tim Sangston, managing director with Greenwich. “They want things to change, but want some [changes] driven by the markets, versus the government.”

Not surprisingly, respondents tend to be most supportive of proposed regulations that would benefit, or at least not impose new restrictions on, their own industries. So, while two-thirds of companies and 62 percent of banks support greater oversight of hedge funds, a whopping 90 percent of hedge funds themselves were either neutral or opposed.

Those differences notwithstanding, responses overall revealed clear support for a changed approach to regulation. “It’s been well over a year, the market’s been bad, and people don’t want to go through this again,” Sangston says. “They’re resigned to the fact that there have to be some changes in oversight.” ###