The Masters of the Universe have been dethroned. Bankers have been forced to cancel their breaks in the Bahamas, cut down on their caviar, and forget the Ferrari.

The era of big-spending, high-rolling financiers is over, and many agree with Sir David Arculus that an increase in regulation is the right way of reining in the excesses which helped cause economic turmoil.

Speaking at last night’s dinner in Birmingham Council House, Sir David said: “What’s recently happened in the financial world demonstrates, in my view, the folly of simplistic cries for de-regulation and the great need for better and more targeted regulation.

“I think one of the lessons from the recent financial crisis is that good regulation is actually the underpinning of all economic activity. A lot of people claim that too much regulation is killing their business but conversely what we have seen during the credit crunch is that bad or lack of regulation can actually threaten the economies of entire countries.”

Sir David’s point seems to be that letting the markets run unchecked was a mistake, and that tighter controls are necessary to curb the high-risk strategies employed by financiers and businessmen.

It is a view which certainly receives widespread support among voters. Many were angry with the “spivs and speculators” who appeared to play Russian roulette with the nation’s financial institutions, causing chaos in the markets and ultimately affecting the lives and jobs of ordinary people.

But within the Birmingham business community the idea of tougher regulation has not been universally and unconditionally welcomed.

Chris Clifford, regional director of the CBI in the West Midlands, said that regulation has already had a marked effect on local business in the past decade - and not all of it positive.

“Some of the consequences of increased regulation have been good, and some of them bad - but all of it has been at considerable cost. Indeed I have heard estimates in the region of £50 billion in extra expense,” he said.

“Much of our work has focused on process improvement and tackling the red-tape aspect of regulation. Both are prizes worth pursuing. A big focus for the CBI will be on reducing the burden of employment law and health and safety.”

The CBI has been lobbying the Government, trying to air their concerns about the extra costs involved in increased regulation.

The Federation of Small Businesses also warned in September that the amount of regulation was too high, and was taking up too many valuable hours of work.

Jackie Hendley, of Birmingham Forward, said that the amount of bureaucracy involved in tax was a major issue.

“Companies are grappling with a new and significantly tougher corporate tax environment which is sweeping around the world,” she said.

“This is driven by a combination of investor protection regulation, shareholder demands for information, and calls for increased regulation as a result of the credit crisis.”

But she argues that increased regulation and monitoring would hinder businesses already struggling to cope in the financial situation. “Everywhere in the world, tax departments are facing increases in documentation requirements and a need for greater accuracy - with less time to complete the work.

“Add to these carbon emissions, pension levies, working family tax credits and a plethora of other regulations to comply with, and this is becoming a big challenge for business. It can easily lead to a diversion of focus from strategic thinking and corporate planning.”

Indeed, so concerned is the British Chamber of Commerce about increasing regulation that they have created a “Burdens Barometer” to measure the cost of tougher controls.

Earlier this year, the report, which compiles figures from Regulatory Impact Assessments produced by government departments, listed 83 regulations which have had a major monetary effect on business. Sally Low, of the British Chamber of Commerce, said: “Our burdens barometer now stands at almost £66 billion, compared to £10 billion in 2001 when we first compiled it. Initiatives without delivery will do nothing to help keep British businesses competitive.”

Yet, despite concerns from within industry, it seems that the pendulum is swinging in favour of regulation.

In January 2007 Gordon Brown, as Chancellor, told a meeting of EU finance ministers that deregulation was the key to prosperity. In September this year he was at the UN calling for greater financial regulation.

The president of the World Bank, Robert Zoellick, told reporters at a global gathering of finance ministers last weekend that “there is a clear recognition about various steps to improve financial regulation and supervision.”

The fallen financiers and humbled hedge-funders may find their high-flying wings will be clipped for several years to come.