The subject of regulation is not a page turner, but we are going to have to get used to reading and hearing a lot more about it. After the recent financial meltdown, regulators around the world are trying to ensure such an event is never repeated.

Last week, Barack Obama launched a regulatory plan that touches all sectors of the financial world. Before that, Europe had its say, proposing tougher controls on hedge funds and private equity.

And next comes Alistair Darling’s white paper on the future of banking regulation. We have only just started the process, but already it looks as if countries are trying to go it alone and that is a huge mistake.

Just as we saw in the financial crash, the world is now too interconnected to have national regulators working in isolation. Their work has to be co-ordinated globally and the G20 is probably the best forum. And they should focus on the big picture.

Accounting standards should be standardised for banks — it is daft that America and Britain operate on two different systems. Mark-to-market accounting should be scrapped — it served to increase stated profits on the way up and increased losses on the way down. A supervisor should be in place to monitor national debt, with the power to ration the availability of credit when it reaches a certain level.

There should be tougher regulation on hedge funds and private equity and more transparent remuneration. Central banks should create an emergency capital pool for banks in trouble. The punishments should be expensive and the same across all countries.

And finally, we should follow the Singapore model and pay proper wages to regulators. Singapore escaped relatively unscathed from this meltdown and a lot of that is down to its regulation.

At the same time, each bank should second at least six people a year to its regulator, in that way strengthening the relationship and understanding of both parties. But the important message is, don’t rush into new regulation. A knee-jerk response runs the risk of being ill-considered and nationalistic, and the last thing we want.

Broadband catch-up

A VISIT to our offices last week by Larry Page, one of the co-founders of Google, underlined the giant game of catch-up Britain is playing to create a world-leading digital economy.

While Lord Carter’s Digital Britain report seeks to address the 11% of phone lines that cannot currently sustain a basic 2Mbps internet connection, Page has just installed broadband 500 times faster in his house in Silicon Valley.

Of course, money is no object for the 36-year-old, worth £11 billion at the last count. That would comfortably pay for a nationwide upgrade to a fibre-optic network, offering speeds of more than 40Mb. Carter wants to impose a £6-a-year tax on telephone lines to subsidise that.

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