Lord Myners made the plea while attending a conference on corporate governance.
âThere is a real opportunity for shareholders to show that they are acting on behalf of their clients and launch a public inquiry,â he explained.
The minister added that while he did not think an inquiry would actually go ahead, he would like to be proven wrong.
He added: âInvestors do have teeth - this is the extraordinary thing about it. They both own the business on behalf of their clients and they also generate huge amounts of revenues for the investment banks.â
The politician also said that certain features of investment banking show signs of a âsemi-oligopolistic marketâ.
According to reports, shareholders are becoming increasingly concerned by the amount of money banks have to pay for rights issues.
Prudential is currently preparing the largest rights issue ever implemented as part of a bid to fund the takeover of AIGâs Asian insurance unit.
The insurer will pay $735 million in fees for the $21 billion bond sale.
By Jim Ottewill