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Policymakers and regulators should consider introducing a set of standards to define reckless or irresponsible commercial behaviour as part of their efforts to respond to the financial crisis and to restore public confidence in the financial system.

Such a move would demonstrate that bankers and business executives would be held accountable for their actions, should they be found culpable of reckless business behaviour, and that the rule of law applied to everyone.

Introducing greater accountability to the conduct of bankers and business executives should be accompanied by a new, balanced approach to regulatory reform which would help to create an environment that would allow responsible capitalism to flourish.

Under such a progressive regulatory system, regulation would be clear and comprehensible, providing certainty and predictability across all markets. There would also be clear sanctions for breach of the rules.

However, almost four years into the financial crisis, many of the new regulations that have been introduced across the global financial services sector have not worked properly. A failure to co-ordinate rule-making effectively at an international level has led, in some important instances, to unclear and conflicting regulations that have created complexity and inconsistency.

Policymakers and regulators must ensure that, in their efforts to reform the financial system and to safeguard it from a future crisis, they do not lose their objectivity and the need to restore confidence in the international financial markets and the free market economy.
 

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