What all of us as national public policy-makers must do, and must be seen to be doing, is work to maintain and increase trust. We need to put in place the right incentives so that, in general, people will do the right thing. To be sure, the need to enforce sanctions when people do the wrong thing is critical.
But when people can operate in an atmosphere of trust, they can spend less energy keeping tabs on others, and can concentrate on more productive activities. We have seen over the past decades that trust is important to a well-functioning financial system.