I tend to agree with your analysis of the dynamic. The facts about debt versus GDP are indisputable.

Good to hear from you, Thank you.

The fact that regulation is skewed and ineffectual is the logical result of the monetary system. It is a mathematical truism.

A debt based fiat monetary system is predicated on inflation.
Inflation is a dynamic that conforms to the law of diminishing marginal utility. If this were not the case, then there would be a direct and constant correlation between government debt and GDP expansion for example. But as clearly shown by official data, since 1980 government debt progressed by well over 1000% whereas GDP barely doubled.

So that as the "beneficial" effects of inflation wane, the monetary authorities must inevitably compensate by intervening directly. But again, as intervention gradually looses traction, the authorities must progressively intervene more forcefully and deeper.

Thus from a political perspective, over time, it is vital that regulation must become lighter, less restrictive and ever less punishing for the sake of the system.

The corollary to the above is that in a debt based fiat monetary system, over time government must inevitably and necessarily become the largest actor in the economy.

The second corollary to the above is that as government becomes larger it must necessarily become more intrusive and more restrictive in order to ensure that centrally directed policies can be enacted regardless of any laws that may exist.

This is a mathematical truism.

Thanks for the feedback and advice. I guess it's slowly, slowly catchy monkey.

Incidentally, the ICB has agreed to extend the deadline for more input from the banking industry & the public:

http://bankingcommission.independent.gov.uk/bankingcommission/wp-content/uploads/2010/10/ICB-Press-Release-7.pdf

I sincerely hope that they have counted my submission as one of the 130 items received so far. Although I suspect that most input is actually from within the sector itself!

The pen is mightier than the sword, they say, so hopefully more independent submissions will be forthcoming.

In the second example in the case of certain countries in the east of the Med regulation is notoriously hopeless.
But does this mean that regulation cant work? Corrupt officials and politicians will subvert it if they can but surely there are honest men out there too and in times like these what is needed are regulations with real oversight and real teeth. Places like the Cayman Islands are a scandal but then every country in Europe seems always to have these tax havens where banking secrecy is the greatest good of all. However on the plus side recently there was a big scare put into UBS by the US regulators. The question is will this kind of pressure continue? In that sense looking at the government we have I can only share some of your pessimism.

Very interesting paper. The upsurge in knowledgeable subscribers and cross-linking between blogs is becoming a potent force.

any joy with the link to your talk in Lancaster?

Thanks for the link to your paper; a cursory glance reveals much in common with the thoughts expressed here by Golem and by others too.

Our French Connection (ribbit!) offers you sound advice. These are, I believe, the tactics that have helped this blog raise it's profile recently. Posting frequently, making one's points clearly and responding to comments promptly and politely have done Golem no harm either!

I look forward to hearing more from you, both here and at your own blog.

I would also recommend Shaun Richards blog:

http://notayesmanseconomics.wordpress.com/

I believe it has been mentioned here before, in fact, I'm sure that is how I first came across it.

Go ahead and cause havoc then.

Slower than facebook, but it grows .