Meet the folks who run the financial system these days (yes, the answer is less regulation of course):

http://money.cnn.com/2012/06/12/investing/jpmorgan-jamie-dimon-testimony/index.htm?iid=Popular

Dimon: JPMorgan traders didn't understand risks

NEW YORK (CNNMoney) -- JPMorgan Chase CEO Jamie Dimon told Congress Wednesday that the bank's massive loss can be blamed on insufficient risk controls and a failure by traders to understand the bets they were placing.

My god. Are you physically incapable of making a thread without strawmanning something or another?

It isn't that this proves we need less regulation, but that existing regulations don't work and simply doing more of the same is fucking stupid, to put it politely.

I wonder if that massive bailout and the guarantee that they're all "too big to fail" could have perhaps trained these people to think that risk isn't a concept that's particularly relevant to their existence, hmmm?

Yeah, I keep saying this. Where is the incentive to change how you operate, if the current practices mean you get huge bonuses during the boom and then unconditionally bailed out when it crashes?

Individuals who don't understand the risks involved with the bets they are making (yes, Dimond used the word bets), don't even think twice about whether or not they will need a bail out.  They will still do it.  

By the way, am I supposed to use a different font or color or something to indicate when I am using sarcasm?  Of course I don't believe the answer is less regulation, if that means reducing both enforcement and also the amount of rules involved in it.   What congress does is increase the amount of rules out there, and says it fixes things.  Individuals in congress they push for funding cuts to say they are cutting the size of government.  End result is that you end up insufficient enforcement, and also a bloated rulebook.  And then you have idiots who try to play under these rules who don't even understand what kind of bets they have.  Then when it goes south, you have the likes of Jamie Dimond going "Whoopsie".  When done on a mass scale, as with the mortgage crisis, the entire system gets threatened, so then here come the bailouts.  All along, these masters of risk end up not thinking for once things could go south.  Individuals with hubris never think they will fail.

There is none. Typically, after the bailouts there was no serious restructuring done to make sure that this never, ever happened again. Just a lot of talk that it would never happen again because... of some reason no one bothered to articulate, maybe because it doesn't exist. And since the big banks have an even larger market share than they did before the crash, they're even more too big to fail than before! It is, by turns, hilarious, infuriating, and terrifying.

I like how we keep upping the "to big to fail" moniker. First it was companies, then industries, then governments, now countries, next planets, then solar systems.

"Too big to fail" means that, you are so needed by the economy that having you fail will take down the economy.  So, end result is you need to get propped up.  What had happened is that the "too big to fail" got that way because everyone merged with everyone else and got real large, and created all these dependencies.  Then there was a form of groupthink that came over folks to think they could take excess risks and get away with it.  Heck, if you see other guys doing gangbusters, you have to compete to.  So everyone takes too many risks, because if you don't keep up with the Joneses, you are out the door.  This madness happens when even rating agencies can't properly evaluate companies properly.

Thing is that the individuals on the high levels get golden parachutes they are paid in case they are let go.  So, they are just thinking in terms of maximizing profits.  There isn't incentives for them to factor in risks, because their jobs are risky to begin with, thus the golden parachutes.  Bailouts are for the companies involved, not the management that makes the decisions.  

Well, then? So what? Let them do it and die and be a lesson to everyone else. It is far preferable to what we're doing now.

And I'm well aware that you were being sarcastic. My point is that no one is actually saying, "Derp, less regulation!" Thus it's yet another one of your strawmen.

You said no one?  Is the chair of the Republican National Committee no one?  He said less regulation is needed:

http://videocafe.crooksandliars.com/heather/rnc-chair-calls-less-regulation-wall-stree

DAVID GREGORY: Let me ask you a very important economic question. You listened to Jamie Dimon on the program earlier. Talk about regulation, talk about the mistake that was made by this trading debt and huge loss. Governor Romney and the Republican party position is to repeal Dodd-Frank, which is financial reform. In light of the losses on Wall Street this week do you think we need less financial regulation rather than more?

REINCE PRIEBUS: I think we need less. I mean the fact of the matter is Dodd-Frank didn't work. The reality is we've got about five to 10 banks in this country that earn our GDP. Those five to 10 banks assets' make up a huge majority of this country's GDP. Now that's an issue. I do agree that this too big to fail mentality is a problem, but I don't think Dodd-Frank fixed anything. In fact I think they made things worse.

Less regulation is a Republican talking point, ALL THE TIME, in response to everything.  It is true this election year.  It is without qualification.  The answer is "Repeal Dodd-Frank" because it is not working and replace it with... nothing.  And this question is in response to the exact issue that was raised originally.  Yes, the GOP says the answer is less regulation.  It is one of their talking points.  It is meant to be a counter to Obama.  Because Obama calls for more regulation, they call for less, to oppose Obama.

And the reality is that, even if there were failures, people taking excess risks don't learn.  They don't.  They don't think it can happen to them.  That is why the do it.  This is particularly true if they don't understand the risks.  End result is the system goes down, and continues to go down.  

No-one saying so in response to this particular incident, maybe, but the background noise is still a general clamor for deregulation.

Perhaps a "value destruction tax" on banks or financial institutions that destroy value through neglect or risky business practices