No respectable financial pundit can resist the opportunity to redesign the global financial architecture. Re-regulation cookbooks are the order of the day in the business columns. Quite right too, in the light of the weaknesses in the financial system that have become apparent since last August and the ground-breaking decision by the US Federal Reserve to extend a safety net to an investment bank, Bear Stearns.

Yet when all is said and done, the regulatory response to pressing and complex systemic problems will rely excessively on a relatively crude expedient: capital is set to become a cure-all for the financial system's woes.