"By now it is pretty clear that it was faith in the techniques of modern finance, stoked in part by the apparent huge financial rewards, that enabled the extremes of leverage, the economic imbalances and the pretenses of the credit rating agencies to persist so long," Mr. Volcker said...IOW, even more regulation, even more gov't-cause market crashes.
It was deregulation that caused this crap, not regulation, derivatives and hedges funds were not legal, back when we had the level head law of insurable interest. Gramm legalized gambling and the tax payed took the bend over position
“IOW, even more regulation, even more gov’t-cause market crashes.”
Consider that after dismantling Glass-Steagall, which was Depression era legislation designed to regulate investment banking, it was less than a decade before investment banks were enmeshed in the biggest financial debacle since the Great Depression.
Finance is different from other sectors of the economy. There was a good reason for enacting Glass-Steagall. Without regulation some people will turn the markets into a casino, as we have recently witnessed.