regulation of markets is an inherent and inescapable responsibility of international and national government. the risk of inadequate regulation was classically demonstrated by the global financial crisis of 2007/2008 in which complex financial instruments secured on toxic assets brought the global financial market to its knees. the global economy is still suffering the effects of this lack of regulation today through economic recession and austerity measures introduced by many governments.

Self-regulation by co-operatives adhering voluntarily to good governance codes and reporting standards may be an alternative to regulation imposed on them, although the global tendency is to make regulatory monitoring and statutory auditing more, not less, binding. regulation, whether it be self-regulation or statutory regulation, needs to be effective and able to prevent illegitimate bogus co-operatives from being established. effectiveness requires that self-regulation complies with the ethical co-operative values of honesty, openness, social responsibility and caring for others. to be successful, self-regulation by co-operatives needs to be open, transparent and accountable so that regulation by the state is not necessary. this is a high ethical standard that co-operatives should aim to achieve in all their activities. National co-operative apex organisations have a key role to play in the design, implementation and monitoring of effective self-regulatory regimes.

In many business sectors, particularly the financial sectors of banking, insurance and pensions, but also in other areas such as food production, distribution and safety, regulation by national state and international agencies will be inevitable. Compliance with these necessary and desirable regulatory regimes ought willingly to be accepted by co-operatives.

there is, of course, a world of difference between sound and appropriate regulation by governments and regulation that discriminates against co-operatives and seeks to restrict their activity in markets in comparison to other forms of enterprise. Sound and appropriate regulation is to be welcomed. Unsound and discriminatory regulation is not. Co-operatives may take comfort from the wording of ILo recommendation 193 that co-operatives should be "treated in accordance with national law and practice and on terms no less favourable than those accorded to other forms of enterprise". this wording in ILo 193 may be used in negotiations with governments on matters concerning the appropriate regulation of co-operative businesses.