And is true of every good intention, trying to prevent such harms can lead to harm.

In a recently published book that I'm currently reading, Other People's Money, the author (John Kay) makes the point that heavy regulation is actually a big part of the problem in the finance world. According to his analysis, most of what investment banks are engaged in these days is arbitrage, which take the form of fiscal, accounting, and regulatory. Essentially, he says that governments and investment banks are in an ever increasing arms race (JP Morgan for example employs tens of thousands of regulatory compliance officers) that ends up being very profitable for the banks at the expense of taxpayers and borrowers, as well as entrepreneurs who can't hope to keep up with tax codes that take 1000 people to read fully.

Kay, although a "liberal" thinker by current popular definitions, suggests that much financial regulation needs to be scaled way back and modernized, and that "reform" is needed far more than regulation. Although I haven't reached his chapters on reform yet, so I'm not sure what he means by it exactly, I believe he is alluding to cultural biases toward making money at all other costs. He quibbles heavily with main stream economists' appropriation of the word 'rational' as only meaning "what makes the most money in the term we're currently concerned about."