In one respect at least, Enron was a most unusual company even when things appeared to be going well. It was a huge, unregulated trading company - in effect, an investment bank that escaped all the normal prudential and conduct of business rules.

Could regulation - of energy trading or of non-bank traders in general - have prevented Enron's failure? This question, already being asked in the US, has found a ready echo in Europe. There, the European Union's attempts to dismantle regulated energy markets are meeting a renewed bout of opposition, using the Enron case as the pretext. The argument is false. But it is worth examining Enron's unusual status in more detail.

Many financial businesses transact business on a large scale in the over-the-counter market for derivatives, which are not traded on exchanges and are therefore free from exchange regulations. But they are supervised as deposit-taking institutions, insurance companies or fund managers.

Hedge funds - essentially fund managers that have too few investors to fall into the regulatory net - are the closest equivalent to Enron. But when they transact business on regulated exchanges - buying and selling equities, for example - their trades pass through regulated brokers. That brings much of their activities, if not the funds themselves, within the scope of regulation.

Enron confined itself to un-regulated markets and was not classified as a bank, insurer or fund manager. It went to great lengths to ensure that its trading continued to escape regulation - one reason why it was such a heavy contributor to political campaigns.

The Act to renew the charter of the Commodity Futures Trading Commission, the futures market regulator, ensured - at Enron's behest - that the company's activities fell outside its super-vision.

An obvious response, therefore, to Enron's demise is to revisit that exclusion. This is all the more politically tempting because the concession was originally granted by Wendy Gramm, the CFTC's chairman in President George Bush Sr's administration. Mrs Gramm then joined the Enron board and remains a member of the audit committee. Her husband, Senator Phil Gramm, helped ease the Act's passage.

But before rushing to bring energy trading - and other un-regulated professional and electronic markets - within the scope of the CFTC, it is worth considering what happened to these markets after Enron's collapse.

Nothing happened. The dis-appearance of a huge participant might have been expected to have a big impact on US energy markets. Yet the lights stayed on, the gas continued to flow. Because they were professional- to-professional markets, there was no damaging impact on consumers.

Enron's trading counterparties had a nasty few weeks, as they unwound the trades and ensured that their obligations were covered. Presumably some of them will end up having to write off net trading positions with Enron that are now worthless.

But the relative absence of wider public impact suggests that the case for exempting these markets from CFTC supervision had some merit. In the same way, Enron's contribution to the energy policy review undertaken by Dick Cheney, the US vice-president, was not as poisonous as is now being suggested.

It mainly consisted of arguing against wholesale price ceilings on electricity and in favour of bringing electricity transmission under federal, not state, juris-diction, to make it easier to move electricity round the country. These are perfectly sensible suggestions. Just because they were supported by Enron does not make them wicked.

There are some lessons, however. The first is that Enron should have been required to publish its results in the same format as other trading businesses, such as investment banks. This would have treated as revenues only the turn Enron made on the contracts it was trading, not their total value. It would have made the company seem less impressive and put its growth in perspective.

Enron was not a deposit-taking institution, or a stockbroker handling client money, and did not need to be regulated like one. But it - and other similar unregulated trading companies - should have been required to report its business in ways that reflected what it was really doing.

A second lesson is that US energy regulation, clumsily divided between the states and the federal government, is a mess and would benefit from a thorough overhaul. The California energy shortage that earned Enron so much criticism in 2000 - and may have given the company an opportunity to manipulate prices - was the product of a deeply flawed deregulation at both state and federal level.

Another jurisdictional problem is the split in financial regulation between the CFTC, the SEC, the Federal Reserve, the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the state banking and insurance regulators. This fragmented structure is made more dangerous by the way the big banks have rushed to exploit the changes to the Glass-Steagall Act, which formerly forced them to keep investment banking separate from commercial banking.

Banks can now serve clients in every way conceivable - as Enron's relationship with JP Morgan Chase illustrates. Morgan was simultaneously Enron's creditor, its counterparty in various complex offshore trans-actions, an arranger of third-party financing and a provider of investment banking advice. Unlike Enron it is a deposit- taking institution and its total exposure to the company - secured and unsecured - is $2.6bn.

This multiplicity of roles calls for a single federal regulator, to oversee all aspects of the new financial supermarkets' activities. Financial institutions that operate on a large scale should be regulated by this single financial services supervisor, leaving state banking and insurance regulators to handle local businesses.

Even before such a consolidated supervisor comes into existence - as at some point it surely must - there is work to do. The Enron case suggests that, by using derivatives markets, offshore subsidiaries and other devices, banks are concealing their true credit exposure from shareholders and counterparties. Greater disclosure of loan facilities and fee-based services is needed.

By participating enthusiastically in the creation of special purpose entities, banks are colluding in obfuscation of corporate accounts. Possible remedies here include a central register for loans to off-balance-sheet vehicles to show the total exposure of individual companies. There is also a case for banning the big international banks from using secrecy havens such as the Channel Islands for this purpose.

Enron was an unusual company. Its collapse does not require government supervision of all unregulated trading companies, though their results should be published in a more revealing format. The story does indicate some big weaknesses in the way existing regulated businesses are supervised. And there is tidying up to do in the aftermath of the abolition of Glass-Steagall.