Reinventing regulation

Abstract

The traditional tools of regulation have failed to effect change in financial services, necessitating a more coherent and substantive response to crisis. It is sobering to witness how quickly policy pure arguments for flexible, efficient regulation lose momentum in the face of crisis. With the death knell of principles-based regulation ringing out, it would only be reasonable to assume that its less government interventionist cousin of “self-regulation” is officially now a regulatory dead end. What has been missing from the debate about corporate failure and inadequate regulatory systems is a serious consideration of the individual ethical and professional obligations of those in positions of influence, expertise and authority inside corporations.