The press are aware of the threat of statutory regulation, the chairman of the Press Board of Finance has said.Lord Black, chairman of the body responsible for financing the Press Complaints Commission, said the industry was proud of self-regulation but understood a need for reform.He told the Leveson Inquiry: “The appetite for change is a very real one...as an industry we are very committed to self regulation... but we have seen that it has weaknesses.”Lord Justice Leveson said “time was of the essence” and any proposals for a reformed PCC must be put to him as soon as possible.He added: "The devil may very well be... in the detail and therefore it wouldn't be possible to proceed without the language of the contract and the arrangement having been clarified and being well-known before one could really reach a conclusion about it."Black said the industry and PCC chairman Lord Hunt were mindful and would work quickly to flesh out proposals.He also said a meeting between Hunt and representatives from all national newspapers in December 2011, including editors from Northern & Shell owned papers that pulled out of self-regulation earlier that year, was promising.He added: “I haven't spoken with [Desmond] yet on the proposals for the new structure, but as you heard from Lord Hunt yesterday he has been keeping in touch with him”.Black said PressBoF had universal support from national newspapers until Desmond withdrew his papers from the system in January 2011, when questioned on a report from 2009 claiming the PCC was an “efficient and accessible regulator”.He said: “The coverage of the system and the amount of money it raised... had been very strong. The phrase may grate in hindsight but at that time it was certainly true.”He admitted he has never believed the PCC to be a regulator and said a hidden part of self-regulation, where newspapers try to resolve issues before going to the commission, was an important part of the ecology of self-regulation.Black was asked about evidence submitted by the editor of Private Eye earlier this year. Ian Hislop told the inquiry he was reluctant to join a regulatory system made up of editors from newspapers his publication regularly criticises.Black said: “I would make the point to him that he is not being judged solely by his peers... I've never met a newspaper editor who would even dream of taking Private Eye to the Press Complaints Commission so it might not be an issue which ever needs to arise.”He added: “But we're looking at obviously many different aspects of the way the system works and reforming it, and I'd like talk to Mr Hislop about that at some point.”Black said his views on the PCC offering financial redress had changed. He said he had been opposed to a fining system but said the phone hacking revelations had shown a lack of power in the commission and forced him to change his view.He said: “It probably took a scandal like that to show us we needed a new body.”He added: “It's [the PCC] changed in every year of its existence, what we’re looking at of course are more fundamental changes and starting in many ways from scratch.”He told the inquiry PressBoF does not seek to control the commission, and he only formally meets with members once a year.He said: “While there is a perception in some quarters that there is a degree of control there, that does not exist.”Black said there should continue to be a majority of serving editors on a future self-regulation committee.He added: “Editors are the ones who understand the real dilemmas at they face in the newsroom, and what the code of practice needs to reflect in that.“I have never seen how you can have a wholly independent process which doesn't have some form of statutory or government involvement in appointing those who might be making the decisions and I would be opposed to that.”Colette Bowe and Edward Richards, chairman and chief executive of Ofcom, also gave evidence to the inquiry together in the morning.Richards explained the principles of the Ofcom code of practice, and said they set out the core issues facing broadcasters in a succinct way.He said: “It is backed by the organisations involved understanding that if they don't adhere to it there will be sanctions and enforcement.“Programme makers are involved very closely in the evolution of the code... We have a very close dialogue with [former and current] actual programme makers, actual journalists...and we draw on that very heavily.”Bowe added: [The code] is trying to get away from a box-ticking compliance culture that doesn't really go to the heart of what people do.”Richards said the importance of independence in the organisation is a “prized characteristic” for many employees and emphasised Ofcom’s accountability to Parliament rather than the serving government. Bowe said she took comfort in the deep interest that Parliament takes in the affairs of the body.She added: “An active, engaged, well-informed select committee which holds me and the chief executive to account... seems to be not a bad model for public accountability.”Richards said Ofcom never intervenes in advance of broadcast.He said: "The negatives way outweigh the positives...it takes you potentially into the area of censorship and suppression.“I think the way our system works is far preferable, which is that the practisers understand the code, they understand the approach we will take if they make an error, they understand that there are sanctions, to which they will be liable if they make do make errors, and they therefore factor that into their judgement and then make a judgement about the broadcast.”He later added: “The press and the internet publishing world starts from a very, very different set of conventions and orthodoxies and culture to broadcasters, and I think that's pertinent.”The pair made a distinction between public figures and ordinary members of the public.Richards said: “We might expect there to be some sort of connection to a position of power or influence throw which they do influence the public more generally...you are in a different category to an ordinary private citizen, but it does not mean that you have no right to privacy at all.”Bowe said broadcasters had to make defensible judgments about how the balance between public interest and privacy is struck in the journalistic decision-making. Richards said Ofcom had been involved in drafting the PCC anti-harassment policy to avoid media scrums.He said: It is a constructive step forward... it's well understood as far as I am aware and works reasonably well.”Richards said Sachsgate, when comedians Russell Brand and Jonathan Ross left lewd messages on the voicemail of an actor, was an example of when Ofcom had stepped in on third-party complaints.He said: “The infringement was repeated more an once and then it was indeed underscored or amplified by the apology, which of course was largely sarcastic... We had the facts of the case in front of us already, we then also had concrete evidence of the significance of the case accepted by the broadcaster.“I think it was entirely the right thing to do and I think it was important... to send a very, very clear signal that is kind of behaviour was wholly unacceptable.”Bowe and Richards continued to give evidence in the afternoon hearing.