Since you seem to be one of the few left out there who still think, amazingly in light of recent history, that financial markets should be unregulated, here's a little background as to how we got where we are.

Before 1929, banks were free to take a lot of risk without regulation. This caused financial panics about every 6 to 10 years. After the huge financial panic in 1929 that pushed the nation and world into the Great Depression, economists and the government set out a plan to prevent these chronic panics. The solution was two fold: First, the creation of federal deposit insurance. This meant people wouldn't lose everything if their bank failed, as was the case before federal deposit insurance. In return for this, the banks were strictly regulated in what kind of investments they could make and what kind of risks they could take on.

This worked for about 60 years in preventing financial panics. In the 90s however these rules were relaxed and banks were allowed to take on high risk investments while still being backed up by federal deposit insurance on the taxpayers dime. Further, the types of investments available became far more complicated and new types of financial products became available. In a decade Wall St. brought the global economy to the brink of total collapse because of their reckless risk taking. But who could blame them for taking the risk? THEY in fact had no risk. They got all the upside and the taxpayer got all the3 downside.

So here we are. Everyone, even bankers, are starting to realize you can't have it both ways. Either banks can risk people's money however they want and NOT have deposit insurance from the government, or they can keep the deposit insurance and go back to having strict rules on investments.

Got it?