What if the cause of the financial crisis was regulation itself?
My own narrative is that the causes of the problem were a) clumsy capital regulations, which induced a lot of financial innovation that was primarily aimed at regulatory arbitrage; b) housing policy that encouraged lenient, subsidized mortgage credit; c) the suits vs. geeks divide, with people in power (in both large banks and among regulators) having too much confidence and too little knowledge.
It’s hard to argue that better regulation, whether of the financial system or deep well drilling in the Gulf of Mexico, wouldn’t be a Good Thing. It’s somewhat harder to see how that comes about, particularly when the regulators tend to develop ever cozier relationships with those they’re supposed to be regulating. I suppose for some that’s a feature rather than a bug.