Tom Broughton, editor

2009 will be the year of the regulator: just take a quick glance at the latest set of seismic events unfolding across the Atlantic. The US Congress will hear this week how its financial regulator, the Securities and Exchange Commission, failed to spot the alleged $50bn fraud by Wall Street trader Bernard Madoff despite several investigations into his business dealings spanning two decades. At the sharp end of this scandal is a long list of out-of-pocket financial institutions, insurers, hedge funds and other investors demanding how and why this was allowed to happen (see page 12). What’s more, liability insurers face further pain and are bracing themselves for a barrage of claims emanating from a pyramid scheme that was found to be built on sand.

To investigate this appalling failure of regulation now is like shutting the stable door after the horse has bolted. A new US government will ride into Washington in the coming weeks and will want to take an holistic view of the regulatory system before making changes. A period of review will precede any action and proposals are likely to focus on wholesale structural reform of the global regulatory system. This will take time. The new US government will not want to be perceived as anti-business in its first term, but it has no choice but to enact change on the crippled economy and to set in place safeguards for the future.

What this will mean for global insurers remains to be seen, but it is becoming clear that a whole new approach to risk management for companies of all sizes will emerge from the embers of 2008. And lawyers will be revelling in the resulting mass of litigation, no doubt planning for growth as they assess the new demand for consulting expertise necessitated by the new order.

And on this basis, anything is possible. There will be further calls for the regulation of ratings agencies; more demands for reviews of European regulations like Solvency II; and the FSA may find itself with a new set of global governors who take over the big decisions, leaving its UK officials to spend more man hours on time consuming and brain numbing Arrow visits.

But if 2009 is to be about regulatory transition, review and reform, as well as fat cat lawyers, it should also leave some additional time and space for the UK market to continue with its own set of exciting structural change, mega-deals, opportunity and ambition until…2010, at least. After all, the economy is not as bad as it looks, is it? IT

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