> I'd suggest we approach all issues with both eyes fixed upon minding our own business.
>
>Perhaps we can agree that there are few simple answers and that those that do exist usually are wrong. ;-)
>
>Whether "deregulation" can be associated with the rise in untrustworthiness in the market will be endlessly debated, as will the origin and validity of Gaussian copula functions that seem to have been misinterpreted by bankers.

"Deregulation" in general is not the problem, it's the manifestation of that concept which can lead to problems. The root problem lies in the incessant need of politicians to meddle in the lives of the governed instead of leaving well enough alone. The American banking system had been working quite well for decades until politicians decided to meddle. Even the problems in the 80s were managed well with little pass-through to the economy at large.

As to the CDS's I'm not convinced the functions are the problem so much as the missing capital to back them up.