Wise words from Andrew Phillips (Lord Phillips - a Liberal Democrat:

As one who has sat on each side of the triangular regulatory table - as lawyer, legislator and City company director - I assert that better regulation can only be a limited part of any deliverable answer. Look at non-financial crime. If more legislation was the cure, we would by now be crime-free. Ironically, the very accretion of regulation over recent years has seriously weakened the organic will of the City to effectively police and address its own ills. But address them it must if it is to avoid regulatory suffocation and/or further self-induced implosion.

Although prospects look bleak, there may still be enough strong, farseeing City people to lead a cleansing yet shrewd reformation. That I believe should be underpinned by a City review commission of all the talents with an uncomfortably wide remit. Now is the time.

He is right: no amount of regulation will prevent unscrupulous people doing what they wish.

That's the malaise at eh heart of the City right now.

It's what New Labour has to recognise.