First off, I will admit that I am no economist, nor accountant, nor businessman of any sort.
However, I do think about these sorts of things a lot...and I believe I have come across a core notion of economics that both fiscal conservatives and liberals can agree upon...that is the idea of openness and transparency when it comes to transactions involving money, material goods, or both.
The argument against "free" markets is that we cannot count on business people to not do corrupt things for their own self-interest, and that there are market externalities that keep wanton self-interest from being the good for all in general--the Madoff incident highlights this quite exquisitely.
Nevertheless, what is that makes us believe that regulators will be any less corrupt? The law makers can be bought through corrupt lobbyists (remember Abrahmov, Stevens, etc.), and executives (like Blagoyevich, and the previous two Illinois goveners) actively look for bribes. It is my belief that regulations can turn things more calndestine than a free-for-all market.
So it seems to me the best systems are the ones that have no parts that don't come before the public for an open and transparent airing of what was done, is being done, or going to be done (at appropriate frequency).
I see two main issues with this:
1) A potential drop in efficiency (though it counteracts the drop in efficency due to lack of trust in the markets).
2) Privacy scenarios -- treatment for ilnesses, family secrets, etc.
Still, the basic ideal seem like a strong one to have.
The Credit Default Swaps were all happening inside backrooms instead of on an open market, and that is what lead its abuse. The confusion created by the Mortgage back securities is the in ability to trace who owned how much of particular mortgages. The TARP program may also fail, due to the lack of transperency in what they are doing and why--if trust in the markets is the core issue.