So how do you want to regulate the "shadow banking system" and the world of derivatives? What kind of reserve requirements should there be for traditionally off-balance-sheet derivatives? What kind of reporting requirements? If I come up with a new kind of funding structure -- something like a CDO, a SIV, whatever -- do I need to explain everything to the Fed first before going ahead with it? Who gets regulated: just the large non-depository investment banks? Smaller derivatives dealers and hedge funds?

I'm definitely sympathetic to the idea that regulators were asleep at the wheel. I just haven't yet seen any regulatory proposals that, if implemented, could have prevented the current crisis.