Or will they get things stable again and then be lured back into the old free market way driven by greed, with the arrogant pretence that they won't make the same mistakes again?

Enhance cooperation between national regulators.

1. if you don't fully understand a product, don't buy it
   
2. if you wouldn't buy a product for yourself, don't sell it
   
3. if you don't know your customers very well, don't lend them any money
   

Only item 2 can be enforced by regulation, and it certainly should. 1) and 3) in Steinbrück's plan would go towards that.

In the long run, we're all dead. John Maynard Keynes

1. yes, and easy to implement - ust have a narrow and enforceable definition of "traditional instruments", and ut everything else into "innovative.

2. yes. impose rules on a risk-weighted basis and on a simple balance sheet basis. Impose standard rules for all (ie don't let banks make up their own rules). Forbid entities that are no so regulated from holding any 'traditional instruments'

3. yes. Board members and Credit Committee members come to mind.

4. That will never work. This has to be solved by increasing marginal tax rates.

5. Bah. Whatever for?

6. No, bad idea.

7. covered under 1 above.

8. bah. Not gonna happen.

There is still a large amount of under regulated money floating around in Russia, the petro-states, China and parts of South America. Even though their stock markets have been hit as well, their economies are not as dependent on financial manipulation.

What will happen is that the west will tighten up regulation (a bit) and banks and other financial institutions will be less inviting to these outside investors, so they will gamble elsewhere.

As long as huge amounts of money are pouring into these states because of the sale of their, increasingly scarce, natural resources they will have an incentive to continue to take on risky ventures.

In addition the fundamental institutions that could control things remain toothless - WTO, IMF, WB, UN, etc. Without some sort of world governance there can be no real reform. The financial black holes like Switzerland, the Channel Islands and elsewhere continue to service this sector as well.

It's not just greed, this only leads to excesses, it is the fundamental defect of capitalism that causes cycles of boom and bust. This has been true since the private stock firm was first invented and there is nothing in the basic organization of such economic systems to prevent it from continuing in the future.

The forces are: market growth, monopoly power, overproduction, collusion and buying government influence.

Finally many multi-national and state-sponsored (or owned) enterprises are now bigger than the countries where they do business. Right now Shell can push Nigeria around, but it appears that a combine of international actors is now able to push the US Federal Reserve around as well. There is much talk of Fannie Mae and Freddie Mac being nationalized to protect the investments by the Chinese government. So who is the customer and who is the producer? Who pulls the strings?

Policies not Politics
---- Daily Landscape

As Germany Friday, Oct. 10 stepped up diplomatic pressure to regulate financial markets under an eight-point plan, Berlin denied it had plans to nationalize commercial banks.

However, Berlin may inject equity into troubled German banks, its two top financial officials signaled as they arrived in Washington for Group of Seven (G7) talks.

Seems they are really troubled about the large commercial banks if they now think about equity injections.

I suspect there would be a lot more unrest in Germany if we didn´t still have all those local thrifts and credit unions. National news and local news both report that thrifts and credit unions show a growth in the number of deposits and money in deposits.

If you listen closely to the rhetoric in the US coming from the Republican side, you can hear this. It's why certain politicians are saying the reason for the crisis is too much regulation, not too little. Y'know, let the market find it's floor, don't do anything, let the institutions go tits up, it's all part of god's....er...the market's plan, divine right of Capital dontcha know? 25% unemploymeny? Homeless families? That's what charity is for!

Thing is, some of the social democratic types still think you can play patty-cake with the clowns that brought you this crisis. Rubin, Clinton, Blair, even here certain unnamed members of the PS.

You can't. It's not a black and white thing, but the shading is not liberalism with regulation, the typical "third way" formulation we all hear about those of us on the left who are plugged into the financial world.

No, that really won't do. What is needed is not liberalism with oversight, but socialism with transparency and a reasonable measure of competition.

And it's possible, I'm convinced of it. We had socialism in the financial sector in the 1980's here in France. Mostly nationalised. Just not enough transparency, to which Jerome's bank can attest the downsides. But....while losses and corruption can happen...you don't get this bullshit, crashes threatening entire economies, when the people own the institution and the investments made need to be accountable not to shareholders but to...the people.

So, Jerome is right this week, the theme is, Nationalise!

But....and this is important... let's keep it that way.  

The Hun is always either at your throat or at your feet. Winston Churchill