Two sorts of regulation

In a recent article in Financial Director, Robert Bruce, warns of the danger of politicians knee-jerk reactions to financial crises. He takes as his text a recent ICAS publication by Laura Spira and Cath Gowthorpe, as 'tres formidable' a pair of academics as one could hope to meet. Their report Reporting on Internal Control in the UK and the US: Insights from the Turnbull and Sarbanes-Oxley Consultations compares experience of the UK Combined Code with American reactions to the Sarbanes-Oxley Act passed after the Enron scandal.

Bruce thinks regulations set in the heat of the moment, like SarbOx, are likely to be poor ones and cautions against political interference in the aftermath of the current crisis. I'm not so sure. At least something is done and the current crisis is an almighty failure of the City's traditional approach of self-regulation.