Uneasy bedfellows

Financial regulation and politics are not the best of bedfellows but when combined with religion it is definitely a case of two’s company and three’s a crowd. Writing in the Spectator last month the Archbishop of Canterbury, Dr Rowan Williams, called for greater financial regulation. He wrote: “...it is no use pretending that the financial world can maintain indefinitely the degree of exemption from scrutiny and regulation that it has got used to.” But is the answer to the current financial crisis more regulation?

With swift additions to the Code of Market Conduct, the Financial Services Authority (FSA) required from midnight on Tuesday 23 September, a daily disclosure of all net short positions in excess of 0.25% of the ordinary share capital of publicly quoted financial companies. In justifying the action against short selling the FSA chairman Callum McCarthy commented in his Mansion House speech later that day that the short selling prohibition was “...designed to have a calming effect—something which the equity markets for financial