For all those laid-off bankers seeking jobs, look no further! The FSA is on a hiring spree, promising to crush the “animal spirits” of bankers, (and who better to do that than spirit-crushed bankers themselves.) With markets crumbling to shreads, the regs may need to begin, yes, doing some regulating.

And with thousands of unemployed financiers, the FSA must be spoilt for choice. But getting in is harder than most bankers think – the regs are fussy, prone to pick robots that tick their boxes over Rembrandts who understand the market.

In recent years, the FSA has somehow morphed from the financial services authorities to the “financially sound asleep.” Their instinct to avoid political heat is twisted; preserving confidence, even when that confidence is false, has always been near the top of the FSA’s agenda. They also succumbed to that peculiar notion that banks could police themselves. But self-regulation is clearly absurd, and more practically, it can’t identify systemic risks—the kinds of risks that arise when models used by each bank tell them all to sell a security at once, for example.

It’s easy to see why the FSA lies supine in the City’s immoderation. If you work for the FSA you probably know, consciously or not, that if you maintain good relations with City bankers you might soon be paid huge sums of money to be employed by them. And therein lies the problem – it’s a question (as always) of monetary reward. As long as the City draws the top talent to it’s trading floors with the promise of huge half-million pound payouts, and conversely, a “regulatory” career promises a pittance in comparison, the brightest people will always choose plundering the City over policing it. The problem thus becomes that the regulators tend to be always just a little less bright, always one step behind – failing to comprehend City bankers’ innovative instruments, hidden losses, or sneaky scams. Madoff’s scam, for instance, was such a mind-numbing black hole even for top financial analysts, that in order to unwind his sordid crimes they’d need a regulatory army the size of China. A handsomely paid army, moreover.

How on earth did we get to this state? What’s the point of having City policemen at all if they’re so radically out-of-touch with, and unmotivated to discover, the financial crimes themselves? Is the FSA that useless? How is it that “policemen” in charge of assessing the markets do not have the tools to understand them?

Astonishingly, two years into the most dazzling man-made financial crisis in modern history, nothing has been done to change the City’s regulatory paradox.

Alas, for bankers seeking redemption, the FSA is no whistle-blowing catharsis. In the real world, as they say, “those who can’t do, teach.” In the world of finance, “those who can’t do, police.”