I suspect the memorable phrase coined today by Hector Sants, CEO of the Financial Services Authority, will long be remembered as a turning point in the debate about regulatory structure.
He said "a principles-based approach does not work with participants who have no principles".
http://www.ft.com/cms/s/0/2dbf2b7e-0ef8-11de-ba10-0000779fd2ac.html for good coverage.
The debate about principles vs. rules is rather sterile - what counts is effectiveness. Sants made this very clear - they are going to focus on outcomes.
The FSA will publish a report on March 18th proposing changes to the UK regulatory system. Cant wait.