You can regulate away but greed will always find away and government intervention only makes it easier.   Once government sets the rules a certain way the greedy use those rules against it.  See ratings industries.  

If banks had been forced to do their own homework and not been able to use the governments agencies as an excuse some of these loans might not have been made.

Quickly - Madoff was a function of larger fraudulant environment.  One should ask what created the situation that allowed such fraud rather than what additional law could have existed to prevent it.  The same goes for the credit agencies - why just a handful with state granted oligopoly powers?  

Naked short-selling and outright bond counterfeiting have been illegal since the 1800's.  It just was not enforced by the legal system - which would suggest the legal system is incapable of "regulating" the financial sector as the latter is clearly more powerful.  The bond counterfeiting of the 90s represents the shaky ladder the US dollar has climbed to the top of.  The cataclysmic dollar crash that awaits is heavily a function of this counterfeit operation.

Allowing banks to expose themselves on derivatives and shift to a negative-reserve from the already unstable fractional-reserve system provided the expanding monetary environment that hid/enabled fraud during the boom years.  While it is true that regulatory laws removed by the Clinton Administration added to the magnitude of contraction later - and yes, the Clinton Administration should be considered at fault for deregulating the behavior of traditional banks in the late 90s - there is something to be said about the persistent problem that arises from the fundamental over-regulation of our economy, specifically the banking sector.  

For this thing to be worth anyhting more than a hill of beans ya would need a congress full of Ralph Naders...otherwise ya end up with a death warrant, only they call it a pardon.

If you don't know what you're doing stay out of the game!

By making the system "fairer" through regulation and government intervention we make it less profitable and less fair to the ones who do know what they're doing.

If you want to invest in a company, land or the stock market, do your homeowrk and hire somebody you trust.

There will be losers and winners and if we try and keep that from happenign we simply bog the system down.

Like Slado said, if ya don't know what your doing, don't take a seat in the game.  Thats why I don't play.  Then maybe we can attempt to tackle the root problems...that the vast majority of Americans cannot retire without gambling with shady bookies in a shady game, and too many Americans can't get from check to check without a Visa.

What do you say to someone who pays 30% more for groceries because he or she lives in a poor neighborhood. Move to a rich neighborhood? So why do the rich neighborhoods have cheaper stores. Well for one they pay off legislators to give incentives to corporations who also pay off legislators to give tax breaks for building super stores in rich neighborhoods.

Don't regulate corporations that profit by poisoning us? The market will punish them because in twenty years all their customers will be dead and so choose, by default, to stop purchasing the assumedly safe product?

In homogeneous societies, where everyone shares the same values, ideals etc. regulation is hardly needed because if someone does dirty dealing they are shunned and usually are accepted back when they correct the dirty dealing.

Unfortunately our world, or should I say my world is not so simple. Without any regulation by honest brokers, things would spin out of control due to greed and exploitation of the weak.