From the statement of someone in the Vatican on economic inequality:

The 41-page text was titled, Toward Reforming the International Financial and Monetary Systems in the Context of Global Public Authority. Prepared by the Pontifical Council for Justice and Peace, it was released Oct. 24 in several languages, including a provisional translation in English.The document cited the teachings of popes over the last 40 years on the need for a universal public authority that would transcend national interests. The current economic crisis, which has seen growing inequality between the rich and poor of the world, underlines the necessity to take concrete steps toward creating such an authority, it said.One major step, it said, should be reform of the international monetary system in a way that involves developing countries. The document foresaw creation of a central world bank that would regulate the flow of monetary exchanges.

The article appears to advocate some sort of international authority to achieve, among other things, the following:

Taxation measures on financial transactions. Revenues could contribute to the creation of a world reserve fund to support the economies of countries his by crisis, it said. Forms of recapitalization of banks with public funds that make support conditional on virtuous behavior aimed at developing the real economy. More effective management of financial shadow markets that are largely uncontrolled today.

Much of the criticism of this seems to focus on the "world authority" part. But what about these three items? Should these be adopted and would we need a world authority to do it?Yes, they should be adopted, but no, I don't think we need a world authority to do it.This chart shows how American banks have monopolized since 1996. Note that investment banks were sucked up along with mortgage companies. Part of our problem is that there is no distinction between types of banking any more and ever more massive amounts of speculative capital can be flushed into any market.These four "too big to fail" banks should be broken up into smaller "not too big to fail" components AND regulatory distinctions should be made in terms of what sorts of things banks should be able to invest in. In other words, investment banks should be separated from other banks. This would accomplish "Forms of recapitalization of banks with public funds that make support conditional on virtuous behavior aimed at developing the real economy."Second, "More effective management of financial shadow markets that are largely uncontrolled today" can simply mean that financial assets need to be "marked to market". In other words, unregulated assets need to be regulated in such a way that their actual market values are known at all times. This is simple market transparency and is at the core of those markets that are regulated now.Third, "Taxation measures on financial transactions. Revenues could contribute to the creation of a world reserve fund to support the economies of countries his by crisis." We are already making public funds available for bail outs. All this asks is that these public funds be provided by the very entities at risk. Broken up banks and the massive OTC (over the counter) market for financial instruments will still be so large that their size alone will always mean that there is nonetheless great interlocking risks associated with them. All this does is ask that they pay their own way.But do we need a world police officer to oversee this? I would argue no. We could accomplish the same thing by just doing this in the United States. Breaking up the banks would reduce our national banking risk and the banks could be reorganized (again) in terms of the kinds of things (with their relative levels of risk) that they finance. Requiring that the unregulated OTC markets now be regulated in such a way as that their values be transparent and capable of being marked to market would give the American market an advantage because who but serious risk junkies would rather invest in a non-transparent market if a transparent market for the same instruments exists? Finally, a transaction tax would go towards making the occasional bail out self supporting and would not put the cost of this on the general public as a tax burden. The costs would go to the people who are playing in the market.I will argue that the American economy is large enough that if we were to do the regulatory reform, all of which would simply serve to create the competitive transparent markets that capitalism supposedly requires, the rest of the world (except for some marginal players) would soon pull into line.