Until mid-2007, principles-based regulation was all the rage among financial regulators. The idea, which involves requiring firms to adhere to high-level principles, rather than prescriptive rules, certainly has theoretical appeal. Among its biggest advocates were the US Commodity Futures Trading Commission (CFTC) and the now-defunct UK Financial Services Authority.
In one speech at the University of Houston's Global Energy Management Institute during January 2007, the CFTC's then-chairman Walt
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