US Outlook Hell hath no fury like a regulator scorned. The public officials who lost their battles for a radical clampdown on risk taking by Wall Street while they were in government are banding together to raise hell now they are on the outside.
When Sheila Bair was the chairman of the Federal Deposit Insurance Corporation, as markets unravelled in 2008, she was the only official pushing for full-on nationalisation of the worst-hit banks, but while she harried managers at the institutions under her regulatory purview, she never succeeded in ousting Vikram Pandit as boss of Citigroup, as she wanted.
When Paul Volcker, the inflation-busting former chairman of the Federal Reserve under President Ronald Reagan, came back to government to advise Barack Obama, he found himself marginalised, and even the planned Volcker Rule named after him, which bans government-insured banks from speculating, is a shadow of the reform he really proposed.
And as for Brooksley Born, she was ousted from her job running the Commodity Futures Trading Commission by President Bill Clinton, when she committed the heresy of suggesting we really ought to regulate this vast and dangerous new market of interbank credit default swaps. If she had won that battle all those years ago, the letters AIG might still conjure up a safe little insurance business instead of memories of financial cataclysm.
These are just three of the big names at the Systemic Risk Council, a new, private volunteer group funded by the Pew Charitable Trusts and the CFA Institute and chaired by Ms Bair, which will act as a kind of shadow FSOC. If you don't know the acronym FSOC yet, you're not alone and that's what has got Ms Bair so angry.
The FSOC is the Financial Stability Oversight Council, comprised of all the US financial regulators, under the auspices of the Treasury, which is meant to watch out for systemic risks, act as an early-warning system and help coordinate action that can rein in dangerous activity on Wall Street before it starts to threaten the public. When financiers next invent a fancy new product designed to skirt capital rules, or a new legal entity, structured to sit outside regulation, as they surely will, the FSOC is the body on which we must rely.
It's not done much yet, though, and with so many competing fiefdoms among its members, it is hard to be optimistic. Regulators are already way behind in implementing the provisions of the Dodd-Frank Wall Street reforms. They have missed two thirds of the deadlines for introducing new rules, through a combination of lack of resources, the complexity of the task and a strong lobbying pushback from the industry. Big questions over what new rules to impose on the "systemically important" mega-banks and global financial institutions, are only now coming into focus.
This is why our merrie band of outlaw regulators arrives at just the right moment. We may have rebuilt the banks, we may be building the international architecture to impose higher capital and liquidity requirements, but we have not built yet an intellectual framework to justify more radical reform.
Ms Bair has identified a core problem with our financial system: the institutions that lend often no longer hold the risk of their loans going sour. Instead they securitise the loans and sell on the risk. She is the advocate of the "eat your own cooking" solutions that force lenders to keep back some of the risks themselves. Mr Volcker's is the curmudgeonly take on it all: banking has got too complex, bankers are not half as clever as they think they are, and a lot of this stuff should just be banned. Ms Born has emerged as an eloquent advocate of expanding the discretion of regulators.
In government, hemmed in by powerful lobbying forces, these voices were scorned. Outside, speaking together, they could provide the credibility and the creativity we need to corral finance into a new era where it serves the public, rather than endangers us.