I am interested in how you think the shadow banking industry was over regulated, and how that contributed to the financial crisis. I think it's pretty clear that the credit rating agencies' (CRA's) ratings failed to accurately represent the systemic risk represented by mortgage backed securities. In fact, the whole tranches structure for mortgage backed securities created a illusion of safety and created an insatiable demand for mortgages (however risky). That demand for subprime mortgages that was already being filled by private mortgage companies before Fannie and Freddie entered the market. If the shadow banking industry had not been eager to buy subprime mortgages, it's difficult to see how that housing bubble could have been created. (I made a longer post on the topic here.) Certainly the government is far from blameless for the fiasco, but blaming it all on "too much regulation" seems simplistic at best.