US planned financial overhaul likely to miss the point

The US Treasury announced plans to overhaul regulation of financial markets once the current turmoil subsides.  While this will be beneficial if it motivates fiduciaries to behave better, the approach will not address the underlying failure of financial systems – evaporation of trust.

Trust is not built upon regulations but on a culture of integrity.  This requires honesty.  If the only way to get the truth is to “beat it out”, there is no inherent honesty.  Whereas if disclosure occurs as a matter of course, fiduciaries can focus on the clinical aspects of financial analysis and process.  To develop a culture of integrity requires demonstration from the top, yet the global economic and social dynamic remains rooted in primitive instincts of survival rather than enlightened values of interdependence and integral behaviour.   America, including Treasury secretary Paulson, and other rich countries and people certainly have the capacity for enlightened behaviour, but it just doesn’t manifest enough.  Fear of failure must be overcome in order to share life.