Obviously some level of moderation is required for a site as large as FT - if only to prevent the board from being overrun by SPAM and trolls. That said, I think whenever possible moderators should be moderate in their moderation.

Sorry, I couldn't resist that last sentence, but I am serious:

If a diplomatically worded PM will get the job done, that should be the approach . . . or perhaps a gentle reminder in the thread can do the trick. Sometimes it will be necessary to make a small (or even large) edit to a post. Sadly, in some cases, time-outs and banishment will be required. The important thing is to use the smallest amount of moderation necessary to keep things running smoothly and in harmony with the terms of service.

I do think the existing framework for moderation is fundementally sound, and the folks that volunteer for the position overwhelmingly do a great job. However, there is, on occasion, friction between moderators and general members. If you examine my platform, you will see that I have given quite a bit of thought to this matter, and have some fresh ideas that should improve things. It is my belief that transparency and consistancy will go a long way to prevent many of these (thankfully rare) situations.