The Federal Reserve is literally an example of the banks self-regulating. Look up the story of Jekyll Island. The problem is, the banks’ idea of self regulating isn’t the same as yours

And don’t think that handing more power to the federal government would be any different. Take a look at what a revolving door there is between banks and regulators, particularly during crises. Geithner, Paulson, Mnuchin, Bernanke, Bob Rubin, Larry Summers, etc…