Effective Financial Regulation is about understanding behaviour

I am prompted to write this piece following debates this past week about capitalism, irresponsible or otherwise, moral capitalism and perceptions of corporate behaviour. Newsnight on BBC2 Thursday sought to portray the current discussion as a choice (battle?) to have capitalism or something completely different. Something completely different did not emerge. UK politicians (Cameron, Clegg and Miliband {E}) spoke about moral markets and corporates ripping off customers. This post is about what I see as the deeper and more systemic failures of our form of capitalism and markets. The UK politicians seem to be preparing us for changes at the margins rather than very much more rigorous regulation.   
Niccolo Machiavelli makes a very insightful observation in "The Prince" (p.15 OUP World Classics 1984) (although talking about power it applies because today controlling money is power) that:
"The desire to acquire is truly very natural and normal thing; and when men who are able do so, they will always be praised and not condemned; but when they cannot and wish to do so at any cost. herein lies the error and the blame.". Understanding this piece of work in a contemporary context would, I believe lead us to designing better and more long lasting regulation in the Financial Sector. He is saying the desire for acquisition is what most of us wish and that many would praise those who succeed but that to do so regardless of the consequences if one has not been successful is a grave error. Now the desire to acquire is constrained by both personal character, personal circumstances and external factors so there need to be rules of behaviour which are explicit and the knowledge of the certainty of enforcement.
It is simply woefully insufficient to say (on Newsnight) as Ellie May O'Hagan (UK Uncut) did that it is not their job to suggest an alternative. There was an honest input from Julie Meyer (CEO Ariadne Capital) who acknowledged that there were bad people out there - perhaps as many as 5% involved in the Financial Sector (that is an awful lot of people - 37500 in the UK alone). This suggests both the need for rigorous regulation and the certainty of enforcement. The market does deliver benefits but light regulation has not worked and the sooner UK politicians realise that the market itself is agnostic about morality if not amoral and it is us who need to impose morality on it to make it work for the benefit of us all not a very small minority. There needs to be stringent requirements such as if there is a serious breach of standards licenses to operate could be withdrawn. The resources necessary for effective investigation and enforcement have to be provided (and don't give us all this eyewash about stifling the market because we now know who pays  - Jill and Jack in Britain pay).  So Messrs Cameron, Clegg and Miliband (E) could we please have some honesty about the real issues - we make the rules that could result in "moral" markets and responsible capitalism and not just look at the consequences whether that be rail fare increases, bank charges or parking fees. If we do not its only a matter of time before the next crash.