The debate about future regulation will rage, but some principles can be laid down:
• Transparency must be paramount
• Proper enforcement of existing regulation is the first priority, before creating new principles or extending existing ones
• Since all liabilities of all financial institutions, including contingent liabilities and off-balance-sheet items, have proved able to generate requirement for government support, regulation must be able to "reach" them
• International coordination is no longer avoidable, including catching offshore/tax-haven funds in the regulatory net (globally, and not just on a country-by-country basis)
• Bretton Woods II is a misnomer: Bretton Woods I was a fixed exchange rate regime, rather than regulatory, and China’s heavily managed yuan rate (with other Asian currencies often managed in parallel: the "soft pegs") is arguably already Bretton Woods II, and a thoroughly bad...
