In a speech that made the banking world sit up and take notice, Andy Haldane, the executive director for financial stability at the Bank of England, warned the Jackson Hole conference that the growing complexity of markets and banks can't be controlled with greater and more complex regulations.
Haldane went on to argue in a speech entitled "The Dog and the Frisbee", that regulators needed to bear in mind five limitations of the human mind. For example, he asked, if computers can't track all the different variables in a hideously inter-woven and inter-linked world, then how can humans?
More pertinently, these complex rules lead regulators and financial institutions alike to "manage to the rules", which means that they go right up to the line at which a crisis is triggered. Then of course they are too late to react.
This may sound obvious stuff. But actually it's dangerously provocative as it challenges the very fabric of the present financial system, one that is precariously trapped in its own complexity. As Haldane warned, "banks are the blackest of boxes".
It's a speech that resonated around the world and in the US earned him high praise, with some commentators claiming him as one of the world's smartest financial regulators. There's the chance to find out what Haldane is thinking now as he takes part in a debate "Socially Useful Banking?" – another hobby horse of his – being held by the Occupy Economics group on October 29.
Apropriately, the open-to-all, free debate takes place at the Friends House in Euston Road; it was the great Quaker families that set up Barclays and Lloyds and so will look back to the roots of banking.
Haldane is proving to be the most thoughtful, and thankfully, honest of regulators; one whom the authorities should listen to more carefully as they pile more and more regulations on banks, yet shirk fundamental reform.
As he also warned, the existing structure provides a subsidy to complexity. It's why this banking model is dead but no one wants to admit it. In my book, the odds on Haldane taking over as Governor are shooting up.