In the years before the crisis, there was a race to the bottom, with countries competing on the “l(fā)ightness” of regulation. Iceland may have been the winner of that race, but its citizens were the losers. As the consequences of these failures continue to manifest themselves and discussions of the new regulatory regime proceed, the problem of global co-ordination has moved centre stage.

Banks within any jurisdiction threaten to take their business elsewhere if tough regulations are imposed (or even if they are asked to pay for a fraction of the costs they have imposed on others). Modern finance is a footloose industry, so the threat seems at least partially credible. If regulations are different in different jurisdictions, there is a real risk of regulatory arbitrage. With finance moving to the least well regulated jurisdiction, there is a danger that the problems that marked the global financial system before the crisis will persist.

These are among the reasons that there is a consensus on the need for global co-ordination. But progress in creating an effective global regulatory regime has been remarkably slow. The Financial Stability Forum, created for that purpose after the last global financial crisis, did little – obviously too little to prevent an even worse meltdown a decade later. This body has now been entrusted with guiding the international community towards a new regulatory regime. The Group of 20 leading economies may hope that changing the name to the Financial Stability Board, and adding a few new members, will make all the difference; but I wouldn't count on it. Perhaps those who believed in the liberalisation mantra that was responsible for the crisis and its rapid spread have learnt the lessons; but mindsets are often not so easily changed.