LONDON (Bloomberg) — Plans to limit leverage, risk and pay at the world's biggest financial-services firms will apply to hedge funds as well as to banks, the chairman of the Financial Stability Forum said yesterday.

The proposals will apply to companies that pose the most risk to the economy if they fail, said Mario Draghi in an interview in London yesterday. The FSF is expected to announce plans to overhaul financial regulation at a summit of Group of 20 nations tomorrow. The FSF last month expanded to include finance ministries, central banks and supervisors from all G-20 nations, including Russia and China.

"If it's a bank, if it's a hedge fund, if it's systemically important it will have to be subject to oversight," said Draghi, who also heads Italy's central bank.

G-20 leaders meet in London today as they grapple with redesigning regulation in the wake of the worst financial crisis since the Great Depression. Details of the proposals on pay, crisis management and "procyclicality" will be published then, said Draghi.

"We expect endorsement from the G-20 for a stronger institutional mandate," said Draghi. "I don't see the FSF as a global regulator at the present time."

Instead, it should be a standard setter that coordinates national agencies, he said. French President Nicolas Sarkozy may walk out of the summit if his demands for a global regulator and tighter supervision aren't met, French Finance Minister Christine Lagarde said yesterday.