All friends together!

With the giveaway name of Bernard Madoff relieving investors of US$50 billion (not a typing error) of their money, the US regulators responsible for overseeing such the financial sector (the Securities and Exchange Commission) have been coming in for some well justified criticism. The SEC Chairman Christopher Cox has even grovelled in public, though only to pass the buck down the ladder to paid employees so that the commissioners, who are politically appointed and therefore ultimately responsible, can try to wash their hands of blame.

Of course, we do things differently in the UK. Don't we? Well, actually, no. It's not only quagmires like Iraq that New Labour has followed the US into. We have also followed their approach of 'light-touch' regulation of the financial sector. A key reason why UK banks got so heavily into trouble following the US sub-prime housing scandal was because the UK regulatory authority, the Financial Services Authority, was funded by - guess who? - the very banks it was mandated to regulate! Its like authorising prisoners to run the prison to ensure nobody escapes. With such a cosy relationship, no wonder things went wrong.

Another fine mess you've landed us in Gordon!