The financial crisis (and gambling losses at legitimate sites) weren't the result of bankers diverting investors' funds into their personal bank accounts, as is alleged here.
That's illegal, and easily prevented at a regulated site where deposited funds are required to be accounted for (and preferably held in escrow). Regulation in banking or in gambling doesn't make it impossible to lose; it makes it possible for winners to get their money and impossible for the company handling the money to simply pocket it.
My point was that regulation and scrutiny didn't prevent the likes of a Bernie Madoff providing a financial product and running a ponzi scheme.
In addition, the financial industry at large can legally provide all kinds of leveraged products which pass scrutiny and result in hefty bonuses (personal profit) but which can end with ruin for the individual and group investors because they are structurally unsustainable (i.e subprime lending had to come crashing). On top of that, the institutions which benefitted during the boom then turned around and asked the people to prop them up despite the questionable risks they took because the world could not afford to have them fail --we blinked.
Your premise seems to be that all regulation is the same. Correct me if I'm wrong but your argument essentially is saying: "financial products were regulated in 2008, well see how that worked out, therefore regulation doesn't really work well"
Sorry I don't buy that. Financial regulations put in place during the great depression worked pretty good. Then they were slowly pared back over three decades starting with Reagan. All the evidence I've seen is that the financial products were massively under regulated.
I see what you are saying. I think regulation helps and it provides a way for redress. Those are good byproducts of regulation. I think my point was that bad people will still try to pull fast ones -regulated or not. I imagine the frequency of fraud could be reduced by regulation.
So, from that standpoint it might be better to have it on the up and up and supervised -but supervised with a very keen eye and a regulation with teeth, as it were.
That's illegal, and easily prevented at a regulated site where deposited funds are required to be accounted for (and preferably held in escrow). Regulation in banking or in gambling doesn't make it impossible to lose; it makes it possible for winners to get their money and impossible for the company handling the money to simply pocket it.