Since before the financial crisis began, I have been explaining why the global financial system is based on transparency complimented by a few simple regulation rather than detailed regulations.  I discuss this in detail in Transparency Games.

In his new book, the former head of the Bank of England, Mervyn King, explains the fatal flaw in the detailed regulation based financial system policymakers and regulators have been putting in place since the financial crisis:

Regulation has become extraordinarily complex, and in ways that do not go to the heart of the problem. … The objective of detail in regulation is to bring clarity, not to leave regulators and regulated alike uncertain about the current state of the law. Much of the complexity reflects pressure from financial firms. By encouraging a culture in which compliance with detailed regulation is a defense against a charge of wrongdoing, bankers and regulators have colluded in a self-defeating spiral of complexity.

In short, the vastly increased complexity of the regulations makes them impossible to enforce and bankers will claim to be in compliance even when they are engaging in bad behavior.