There's a common saying that you never pay attention to your electricity provider unless the lights don't come on. Well, it's the same thing with the various regulatory systems throughout the world. For the most part, they tend to be invisible, unless there's a problem.

Unfortunately, over the past year the financial regulatory system has been extremely visible, and not in a good way. As the post-mortems on the economic downturn continue, regulatory bodies are being put in the spotlight. Why didn't they prevent the crisis or at least send early warning signals? How did the examiners allow institutions such as Lehman Brothers, AIG, Bear Stearns, and Citibank to assume so much risk? How did various Ponzi schemers slip through the regulatory nets for so many years?

Even at the Securities Industry and Financial Markets Association's annual conference in New York last week, the head of the SEC, Mary Schapiro, said, "the right questions were not asked...to mitigate the risk before we coasted to the brink."

Given the chorus of criticisms, momentum is building to fix o