The failure of the regulatory regime as evidenced in the ongoing crisis has its origins in many fields. Two factors that have abetted this failure relate, one, to the conventional emphasis on macro-management and an arm's length relationship with the regulatees, and, two, to the belief that the market is endowed with the capacity to periodically readjust itself to changing requirements. This article first considers the evolutionary aspects of corporate and regulatory management. It is recognised that regulatory failure extends to many other areas. Four cases are cited to illustrate this aspect. The modus operandi of those engaged in fraudulent behaviour and how the regulatory agencies have a handicap in addressing systemic failure are discussed. While emphasising the need for a road map, the article outlines a few directions in which the first steps have to be taken.
