But globalisation and the advance of information technology have upset the balance in financial markets. What is needed is not so much one massive redesign as a process of permanent adaptation. Co-operation is the key. The world's regulators are coming together in more ways than most people realise. The Financial Stability Forum is a good example.
Transparency is also important as a way of limiting the herd instinct of investors.
What we need to do is to encourage best practices on the regulatory side as well. None of these things will happen without courage. The IMF has actually exhibited quite a lot of bravery in telling governments what to do. But we must find ways to introduce the private sector. We cannot suppress risks, but we should make sure that the balance between those risks and rewards is clear.