This has been an important month for banks and the leading message emerging from it is that bank regulation is still impervious to the wiki culture. Yes, there are attempts out there to do social media but looking deeper, bank regulation is not  an engaged debate. We have ourselves to blame if, as I suspect, it shows a limit to how we do Wikinomics right now.

On September 12th the banking regulator, the Bank for International Settlements issued what’s known as the Basel III accord. That is a set of new capital adequacy rules. Generally speaking Wall St likes them and so too do the cities of London and Frankfurt. Bank shares rose. But the sting in the tail is that banks now fear that their national regulators will take the capital adequacy issue more seriously and impose harder targets.

“Top bankers in the UK, US and Switzerland are braced for their national regulators to impose tougher capital requirements than those required by Sunday’s landmark global agreement, even as investors bid up bank shares on relief that the standards were not more rigorous.”

The real issue here is not just that the targets might be set too low (there are arguments for and against) but that the reforms won’t be fully effective until 2019 some 12 years after Lehman. At the same time the International Accounting Standards Body is trying to reform lease accounting – in response to the Enron crisis. Again the lag between need for action and enforcement will be some 12 years.

What’s wrong with taking your time? It’s better to get this right than make more mistakes?

It seems that national regulators might well agree that change needs to be deeper and quicker, though we have yet to find out for sure.

The point that I think it raises though is that banks need more exposure to the faster cycles of modern business. Between now and 2019 there is almost certainly going to be one more crisis. We have now the experience of an 6 – 8 year bubble cycle, from the dot.com boom and bust to the housing boom and bust.

Accelerated information flow might be the reason. As with individual products (the iPhone, Facebook, Google) it is now possible to go from a standing start to hyperscale in the same time frame.

On the one hand banking stability is good, but on the other hand banks are integral to booms and busts. When stability is needed they are seen to be embroiled in these hypercycles. So there is an argument that says the new capital adequacy rules will come too late to prevent the next morphing of capitalism.

The better path would be for banks to become more engaged, for bank employees to be better schooled in how business is now done and how consumers now think and behave. This is being done in small doses, the bank blog, the mobile app. And behind the scenes banks are trying to adopt collaborative platforms.

The problem lies more in the relationship of the bank to the regulatory world, which seeks to be over-protective, and provides an excuse for inaction on social technologies (we are a regulated world, cry the banks when advocates of social technologies argue for change).

It leaves bankers in the same position as lawyers and accountants, two professions that self-regulate and also remain impervious to change. What I would like to have seen from the BIS is a Committee on Social Technologies and Banking, one that would formalise and give credence to a vision of the future that goes beyond capital adequacy to other forms of adequacy, adequacies in more modern customer engagement.  It raises this question: how does the wiki-world engage with the world of regulators?