A much chastened world with greater regional and global coordination in banking and securities oversight, with the reversal of a long trend of deregulation and privatisation in the financial services sector will emerge once the current global economic crisis subsides.

Standard & Poor's Ratings Services' economists say that among the findings discussed in a report, How Today's Turmoil Will Shape Tomorrow's Markets published yesterday, are:

- Risk aversion in the wake of declining valuations in the structured finance market, especially in the United States, will continue for the foreseeable future.

- More coordination among regulators across national boundaries is inevitable.

- As markets become more global, so will financial centers. We believe trading will be concentrated in more than one center, and three major focal points - in the US, Europe, and Asia - will foster 'round-the-clock' trading.

- Markets will become more dispersed, and secondary centers will become more important, but national financial capitals will remain essential for certain types of trading or for domestic companies.

- Securitisation will likely be revived, but only in the simplest forms, at least for a while.

"The players and the regulators are changing, but exactly how remains difficult to determine," said S&P's chief economist David Wyss. "The trend toward globalisation of financial markets will likely accelerate, in part because of capital injections from overseas investors into US banks and financial institutions. The trend toward deregulation seems likely to reverse… We expect one result of the current turmoil to be a streamlining of the regulatory structure, even if the US doesn't move to a single regulator as the UK has done," he continued.

"Moreover," adds S&P's Asia-Pacific chief economist Subir Gokarn, "The role of government in financial systems around the world will increase significantly, and conventional boundaries between the state and markets will be subject to challenge."

Across national borders, S&P economists expect to see a re-intermediation of banking systems, especially in the US, where there has been more market debt than bank debt. The European banking model of investment banking, we believe, appears to have won out as investment banks in the US have been absorbed into other banks or have taken on quasi-bank status.