The real lesson from the financial crisis is that we need to stop insulating financial regulation from democracy

The financial crisis has generated a number of policies and discussions across Europe aimed at reforming financial regulation. Nicholas Dorn writes that while there is widespread recognition that a rethink is required to prevent a similar crisis from occurring again, the core problem underlying the crisis has yet to be addressed: the fact that financial regulation is not subject to democratic pressures.

He argues that party politics should play a key role in regulatory approaches and that this would lead to more diverse approaches being adopted within individual states, thereby reducing the potential for large systemic crises to spread across the world.