Are we going to enter a post-regulatory age?

The Financial Times this morning (9 December) has issued a warning that we appear to be entering a time when financial regulation may be relaxed.

Perhaps surprisingly for what is seen by many as the bastion of commerce, the FT bemoans deregulation, and seeks to remind us (as an article of faith) of the virtue of strict financial regulation.

Now you might say that regulation is necessary to remove bad actors from a tainted market, and to reassure participants that they aren't being exposed to risks. Fair point. But the FT isn't decrying the removal of all regulation (which even I would concede is not to be encouraged). It's decrying a loosening in regulation.

 On that point, I'm not so sure.

Quite apart from ignoring fallibilities in regulation and regulators the world over, such a position is untenable because financial systems need to evolve, and so does how we look to regulate them. 

Perhaps surprising for a regulatory lawyer, I am not convinced that regulation is ever a panacea. At its most extreme, I see over-regulation as economically crippling, anti-competitive and stifling; a negative impulse which drives the life-bloods of innovation and entrepreneurialism out of the industry. 

Flexibility. Agility. And a willingness to engage constructively with the financial industry must surely be the mark of effective regulation.

All of that has to be a work in progress. And, at least, here in the UK on the very day that the new Senior Managers & Certification Regime comes in to full effect, the FCA has a golden opportunity to demonstrate these credentials in the coming months.

But do we think they'll do so?