[steve911]

Originally Posted by widebody911

If the regulators/regulations were so good, how come the government's stress tests didn't pick up on the hedge as a problem.

I don't think the 'stress test' is run on a regular basis.
The latest stress tests were run in the last few months. The hedges have been in place for a while.

politicians claiming that this loss now justifies further regulation to protect the taxpayer and the financial system is just plain hooey

So you're saying less regulation would have prevented this?

I'm saying that more regulation is not the answer, as the regulators are incompetent. Further, the company was attempting to hedge its corporate debt portfolio; I don't see how or why this should be regulated. As others have said, shareholders should (and have, witness the decline in the stock price) be the ones who suffer.