As we have all seen, the idea to stop regulating financial institutions and let them do what they want to do was not a particularly good one. It may seem obvious now, but it definitely wasn't so evident ten years ago. The crysis has showed, though, that banks, hedge funds and many others will do anything they can to make more money. And it wouldn't be a problem if risks were kept under control. They only problem is that revenues and risks are not positively correlated. Besides evaluating risks for derivatives or complex financial schemes is usually an extremely difficult task.
The only solution in sight is to create a dynamic system of regulations to keep financial markets under control, and at the same time try not to interfere in their operations too much. The task may seem impossible, but with the right people it can definitely be accompished. Seems that Daniel Tarullo, one of the governors of the Federal Reserve appointed by President Barack Obama in 2009, is a good example.
Read about him on Businessweek: Daniel Tarullo, a Fed Regulator Who Actually Regulates
Or in Wikipedia: Daniel Tarullo
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