Even with all the regulation, look what happened to the states just a few years back. You can be incompetent with or without regulation. The only difference is that only some incompetence is backed by the most powerful government in the world. (for now)
Years of gradual deregulation and malfeasance. The laws that would have prevented much of the US economic crisis were repealed. Not that there might not have been a different crisis in its place, bright minds can be very creative when finding ways to make money.
Really though, I'm off.