Advocate

Neither, it should be a blended of two. Being a study of economics and finance, I can tell you that deregulation causes problems. At the same time, over-regulation can curve innovation. Some people will argue that consumers should be more prudent, but let's be realistic here. That will never happen. It only takes one major fuck up to screw up the whole system (research Long Term Capital Mortgage as a great example).

Look at the US before the Glass-Stegall Act. Banks had little to no regulation that eventually led to the Great Depression. The Glass-Stegall act was brought in to make sure banks had certain funds on hand. Then in 1999, the US got rid of the act. 10 years later, we are now in the position we are now. Banks were lending out money they did not have. They were getting credit on credit that was on credit.

That is just one example.

So the solution is not deregulation, nor is it regulation for the sake of regulation. It is smart regulation, where you place problem regulation in the right areas, while at the same time encouraging the market economy.