Whatever the outcome of the Group of 20 meeting of world leaders in London, it would be helpful for them to pause for a moment to consider the aviation analogies for our crashing financial markets and stalling world economy. Out of this current crisis, black swans might yet gain silver wings for the future.

The very aviation system that is relied on globally for safe transportation can be the inspiration for a new form of global financial regulation. Similarities exist in at least four areas. All are built on strong international coordination and would have been extremely useful to our global financial system over the last 12 months.

Allocation of responsibility. Air traffic control has dealt with this in a pragmatic way: Each country controls its local airspace, with international organizations handling the space between nationally designated zones. All pilots know exactly when and where to listen and to whom, without the oversight of a global authority. In other words, there is no global regulator. It is sufficient to have agreed standards and procedures, and to allocate the territory.

That allocation has also been a given for the financial industry. The current regulatory system follows the principle of sovereign territory and is well taken care of. Subtleties can exist, as is the case in Europe, where there are directives applicable to euro payments to be ratified in all countries of the European Union, but such deviations are manageable. Therefore, a global regulator may not be needed. Internationally agreed standards, practices and procedures may do.

Minimum safety standards. Each civil aircraft is subject to rigorous and documented inspection at predefined intervals. Missing documentation or suspicion of malpractice may prevent entry into a particular airspace or even ground an aircraft. Certain types of aircraft may be banned at some airports because of mere engine noise.

It could be sufficient for financial regulators to define the tolerated risk level of a product and deny distribution rights in case of missing documentation or unacceptable risk level. This does not mean all countries need to apply the same rigor; they just need to agree on common documentation. Any regulator can decide what to allow in local "airspace," depending on the desired level of investor protection.

Common language and procedures. Any pilot must speak English over the radio and use internationally agreed-upon calling alphabets, using words such as Charlie Delta Sierra (for CDS), to pass on important information during a flight.

This could be very inspirational to facilitate financial regulation. Think about accounting or voluntary regulatory frameworks such as Basel II. This would help categorize risk. Regulators could collaborate with existing organizations that are used to defining market practices, such as the International Swaps and Derivatives Association, to define the international financial traffic control signals. This would probably mean a calibration by regulators of ratings, and probably additional ratings based on prospectus appreciation.

Also, in modern air traffic control, airplanes are not even allowed to leave the departing gate when there is congestion at the airport of arrival.

By analogy, a national regulator could close down a certain asset class after determining risk was piling up in an unacceptable way. For instance, a regulator may decide that all mortgages sold in a given jurisdiction cannot surpass a given amount or percentage of a meaningful entity, such as the gross domestic product.

Real-time management. Radar is essential in today's crowded airspace. Global financial markets do not have an equivalent. At best, there is periodic reporting, which may help assess long-term solvency but does not help in sudden liquidity crises.

It would be sufficient to have a bank or hedge fund declare in real time its position to a regulator. Pick any algorithm you want — crude radar is better than none. You can always refine.

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