National regulation can tax cross-border capital flows. Supranational regulation may have to be agreed along the lines of Keynes' International Clearing Union (updated for the 21st century) if things get much worse. And self-regulations simply doesn't work.

We have met the enemy, and he is us — Pogo

That is the conventional wisdom, but as REACH showed in manufacturing, it might not be the case.

It is still the case that certain markets in the world are so important (and the US is one of these in various financial transactions) that regulations there actually filter out to the rest of the system.

Yes, there will be loopholes and yes some people will avoid compliance by moving operations to the Cayman islands. In the end however, a first step to stabilising the system is regulating the activities of savings banks, most of whom do sit in a geographical position they cannot escape.

Now I know you have no interest in measures to stabilise a system you believe to be doomed, but that's a separate issue.

I think you mean decentralised multi-stakeholders regulation rather than self-regulation. In that case, I agree, regulation should take place at the relevant level, which varies with the kind of market. However global markets have to be regulated at a global level.

And to insure fairness and transparency, the rules and methods for decentralised multi-stakeholders regulation must be defined and agreed at a global level.

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet