Tom Broughton, editor

As a political hot potato the issue of regulatory reform is burnt to a cinder. The Bank of England boss Mervyn King doesn’t believe he has the tools to maintain financial stability. Gordon Brown is desperately clinging to his job while trying to fend off a threat from the mainland over supervisory control. And across the pond President Obama knows he only has a two-year window to push through wholesale reforms to the system, as history dictates that it is the Federal Reserve who picks up the bill when the wheels come off. (See pages 18–19).

On the face of it, nobody disagrees that there needs to be stronger capital and liquidity rules as well as wider pan-industry and cross-border supervision. But the tear up will inevitably centre upon who and how it is achieved at a local, European and a global level. This is particularly pertinent when you consider where a light touch is needed against plans for wholesale reform. As apart from those companies with troubled banking parents or dabbling in niche, high-risk financial lines, insurance came out more or less unscathed from the crisis. But view the competing reports of governments, vested interests and changing political landscapes and the mess and uncertainty looks set to continue for months to come.

Meanwhile on the ground the FSA has, once again, outdone itself. This time it is writing to insurer chief executives to warn against the potential unfairness to customers over rising payment protection insurance premiums. There’s nothing like focusing on the big issues in times of crisis is there? And five years too late at that.

Running out of gas

The motor market is close to boiling point. A report by Deloitte last year revealed that a reserve release of over £1bn was necessary to prop the market up in 2007 due to the race for market share. Anecdotal evidence from leading insurers reveals that the situation is not improving despite chief executives talking the market up. This week our report on pages 41-43 reveals how the motor fraud hotspot of Bradford is contributing to the mess. And more tellingly how one in 10 accident management companies have pitched up in West Yorkshire. The report tells the story of how organised gangs focused on insurance fraud can criminalise a faction of a community. And as recession bites it reveals that it is also creating a wider problem away from the numbers associated with the motor market.