Nicholas Sarkozy made an important speech yesterday. He said:

The idea of an all-powerful market without any rules and any political intervention is mad.

Self-regulation is finished.

Laisser faire is finished.

The all-powerful market that is always right is finished.

He's right.

But let's be clear, as he also said:

The crisis is not a crisis of capitalism. It is the crisis of a system that is far from the values of capitalism and has betrayed capitalism.

Capitalism must be refounded on the ethic of effort, hard work and fair rewards.

We have to have a new balance between the state and the market

I agree with that. I am unashamed of having real companies that made real profit as a result of real effort by real people. They helped meet the real needs of real human beings.

They, and companies like them, are far removed from the world of the financial markets. There the prim nary purpose has been to steal public capital for private benefit. That's something very different indeed.

But there's an issue he has to address, and which he only hinted at when calling for the reform of the Bretton Woods institutions, which he did. Unless we close down the world of no rules, the companies that are nowhere, and the secrecy jurisdictions that promote them then this won't happen.

Bluntly this contagion started offshore. Without closing the secrecy world of offshore for good (including in the City of London and New York) it won't go away.

That's the reality. Let's face it. Now.