Sounds more like the people at the top of the chain having different incentives and thus neutering the people further down who actually wanted to get their job done.

Yup. The lunatics have taken over the asylum.

Doesn't matter who cut who's balls off. No balls is no balls.

Or more to the point, if you are overseen by congress, which is in the pocket of these big banks, then regulatory action can be dangerous to your career.

"Get big government out of my business!" "These regulations are killing my business!" "People are going to go overseas and do the same thing!"

It's not just congressmen too. Even the public can be turned against the regulators with a steady drip of anti-regulation rhetoric from the newsmedia.

Regulation can't be shown to actually work in many cases. The way it is made is .. terrifying.

This is a corollary of "it's twice as hard to debug something as it was to write in the first place."