UK: Some sectors need more regulation, but many need much less

In the UK (but this is also relevant for many other countries and more the capitalism - regulation - needs of micros and SMEs discussion (see post), there is much debate going on regarding heavier supervision and regulation of banks and other financial services. Eg the government's Financial Services Bill and the issue as to whether a watchdog (eg the FSA) should have a word over top exec pay in banks.

IMO, whereas banks may need to be more heavily regulated due to their "too big to fail" nature as part of the economy and their involvement in the daily lives of most people (as far as retail banking is concerned), radical deregulation IMO is urgent for SMEs and micro companies in many other sectors of the UK economy (and other economies).

Not to mention that IMO a radical re-think of the total model of financial services and banking would be in order in the UK, the EU, the US, almost everywhere. A comprehensive re-think of what is the reason of being of banks, their business model (especially the presence of many different and some difficult to appreciate types of risks), all aspects, in parts and as a whole, would be in order, in the aftermath of the crisis.

But in any case, banking is not a "business as usual" or "business" in general. It has complex systemics and structures that are far reaching and cut to the bone of any economy and the people.

So, what about top exec pay in banks? Should anyone "interfere" in those "contracts". Well, for one, the Plenary of the stockholders should, but that applies to any company in any sector whose shares are traded (publicly quoted, see "Corporate Governance" or what I prefer to call "Corporate Democracy"). Should a retail bank have the pay of its top execs approved or vetoed by "the state"? Only when and while it has borrowed money from the state or the state is a shareholder? Or in any case, because banks "need" to be bailed out in case they may fail because they are "too big to fail"?

By the way, more than 100 banks have failed or been "closed" by the authorities in the US this year. Of course FDIC reimburses all deposits of up to a certain level (the rest was part of a depositors "risk"). But banking and its systemic role and effects in an economy as most economies are today, especially in the UK and the US, are much more than just the deposits, isn't it?

Oh we do live in interesting times. Quite a curse.