Maturity Mismatch - obvious starting point for reform

Regulators are running around like head-less chicken, applying completely arbitrary principles when deciding on an ad-hoc basis what to do in each individual problem case and therefore just fanning the flames of the credit bushfire.
A key feature of the ongoing banking crisis is the fact that institutions that may well have balance sheets that in the long run would turn out to be more than viable are facing the equivalent of a 'run on the bank'. Is Hypo Real Estate, to pick just one example, really ready for the knackers yard or is the fact that it cannot roll over short-term financing nothing but a short-term liquidity problem?
Whichever way this sorry saga ends one simple lesson must be learned: it is just not enough to force banks to finance themselves if possible with more genuine retail deposits but they must be made to finance their assets with liabilities that are matching by maturity. Only small deviations from this principle should be allowed. Monitoring this should be a relatively simple task for regulators and therefore eminently practicable. It just is lunacy to finance long-term mortgage lending with funds raised in the Inter-Bank market on an overnight basis.