The failure of Equitable Life, a sad story that resurfaced last week, seems barely significant in the context of the global banking crisis. But it contains critical lessons for the future of all financial services regulation.

Equitable Life was a medium-sized mutual British life assurer with a relatively affluent and sophisticated clientele. Its business strategy paid out to its customers amounts close to the full value of their share of the underlying assets, including the goodwill of the business. This approach was fair to successive generations of customers, and gave the society a strong competitive position in life assurance and pensions markets.