New financial services sector regulation borne out of the global financial crisis could do more harm than good, according to Federal Opposition financial services spokesman Chris Pearce.

He told a conference of the Securities and Derivatives Industry Association last week that Australia’s financial regulatory structure has held the sector in good stead throughout the current financial turmoil.

“To this point our financial institutions are weathering the storm,” he said. “We must not unnecessarily over-regulate and strangle our nation’s financial services industry, as nearly all Australians would be adversely affected.”

The comments come after PM Kevin Rudd late last month declared a new era of financial regulation and government intervention to restore confidence and stop capitalism “cannibalising itself”.