The recent global stock market recovery may signal the worst of the financial crisis is over, but the lessons learnt must remain important priorities for money markets. Ian Luder, lord mayor of the City of London, told White Collar this week that improvements in risk management to prevent a repeat of the crisis should be a top priority. The City of London is one of the leading financial centres in the world and, like Hong Kong, has been hit hard by the crisis. Mr Luder believes that regulators and governments will introduce regulatory reforms requiring companies to add more internal risk controls. Britain's Financial Services Authority, for example, will order banks to top up capital levels to ensure they are not over-leveraged. 'What is important is to make sure banks can cope with more bad times,' said Mr Luder. 'We cannot escape [down] economic cycles after a boom market, but we need to require banks to prepare their capital levels' for troubled times. Mr Luder also believes that regulations on executives' discretionary payments will be tightened, as banks and insurers that needed government bailouts to survive still paid huge bonuses to senior staff. 'We will need to look at remuneration arrangements. I am not among those who believe high remuneration to be a bad thing, but the current way that bonus payments are linked to annual performance may lead management to eye short-term profit,' he said. Mr Luder suggested bonus payments be linked with longer-term performance, such as the past five years of a company's earnings. Born and bred in London, Mr Luder qualified as a chartered accountant and tax adviser with Arthur Andersen and was a partner from 1989 to 2002. Since 2002, he has been a partner with Grant Thornton UK. Elected as the lord mayor of the City of London last year, Mr Luder sees promoting the Square Mile to the world as one of his major duties. 'I hope China can help to bring the world out of recession,' he said during his latest Asian tour. Even though the mainland wants to develop Shanghai as an international financial centre by 2020, this would not affect London's relationship with Hong Kong. 'London does not abandon old friends, although we acquire new ones. Hong Kong, Mumbai, New York are all old friends to London.' Forgotten reform The financial crisis has finally convinced the local insurance industry of the need to set up a policyholder protection fund. The Hong Kong Federation of Insurers last week submitted a proposal to set up such a safety net to protect the benefits of 7 million policyholders in case their insurance company collapses. A good idea, but the bullet also needs to be bitten on another reform - to make the insurance authority an independent body from the government and run more along the lines of the Hong Kong Monetary Authority. The first time the government talked about such a plan was 16 years ago - there should be no more excuses for delaying the reform.