Nov. 12 (Bloomberg) -- More than 75 percent of company executives agree that credit-rating agencies must be regulated, according to a survey published today.

While hedge funds and structured-finance products should join rating agencies in getting more supervision, global bans on short-selling should be lifted, according to responses to the survey by London-based law firm Allen & Overy LLP. It canvassed 735 chief executive officers, chairmen and general counsels, with 350 of the respondents working for investment banks.

The survey comes three days before leaders of the Group of 20 industrial and emerging countries gather in Washington to consider steps including bank-capital standards and accounting rules to prevent a repeat of the risk-taking that helped lead to the worst credit erosion since the Great Depression.

``We fear that in the absence of an informed debate that fully engages market participants, we could face a knee-jerk political reaction that is focused on punishing the markets instead of helping them to function efficiently and securely,'' said Wim Dejonghe, managing partner of Allen & Overy.

Seventy-nine percent of respondents said financial regulators should be restructured or consolidated.

``Many comments provided by respondents call for better resourcing of regulators including better pay and more high quality staff who understand how complex modern financial markets work,'' the survey said.

The heads of the U.K.'s Financial Services Authority have said they want to add better qualified staff, particularly those leaving positions in banks and other financial companies, to improve supervision. The regulator will have to pay more to attract new recruits, which will result in higher fees charged by the FSA in its annual levies that fund its budget, they said.

Short-sellers borrow shares which they then sell and seek to buy back more cheaply should the price decline.

The FSA was in September the first regulator to temporarily ban short-selling of shares in financial companies in a move followed by authorities in the U.S., Italy and other nations.

To contact the reporters on this story: Caroline Binham in London at cbinham@bloomberg.net.

Last Updated: November 11, 2008 19:01 EST