Sub-par regulation is a bad thing.
The question you have to ask is, "What is sub-par regulation?"
Think about it in the context of the current banking environment. The last time we had large scale disintermediation in this country was the savings and loan crisis between 1979 and 1981.
The last time we had interest rate risk problems in the banking business was the 1990s.
The average bank regulator wasn't even egg and sperm yet when the savings and loan crisis hit. They probably were in diapers, if not en utero, when the last time anyone seriously paid attention to interest rate risk. Anyone from the 1990s era who is still around either is behind a desk ordering a battalion of 20-somethings into the field or is so incompetent they could not find a job outside government.
Good regulation requires taking risk. In the case of SVB, the fear was that if anyone wrote the bank up for interest rate risk, Gavin Newsom and the California political elite would be on them like a GAO cost cutter with a bayonet. You aggravate the wrong people and, God forbid, you might have to work for a living. Same thing happened before, which is why Charlie Keating kissed John McCain's backside and operated a failed thrift for so long.
The result is that bank regulators get experience doing examinations and then either move into the private sector if they're good and into management if they're not.
