What's wrong with the market operating on it's own?
IMO it should be allowed to operate on it's own and left to take the hit when it screws up...period.
Remember the savings and loan thinigy a few years back? That happened under regulation.
So regulation or no regulation can lead to a failed or damaged market.
The key to the whole thing is to not have all the banks so intertwined that when one fails because of stupid decisions many others are affected.