Surprise, Surprise Barney Franks wants more government regulations

Yesterday, Barney Frank proposed the outlandish idea that the Federal Government create a new risk regulator that would work with the Federal Reserve to limit risking taking by financial institutions . Here are just a few of the reasons this is ludicrous (this is by no means an exhaustive list):
-Which government is it that doesn't have its own balance sheet in order? Hint: Ours. This disorder is represented by the current $9.3 Trillion deficit. Consequently, this number increases by about $1.6 Billion per day.
-How can our government propose risk regulations when it clearly doesn't understand risk? There are long-term economic consequences to running large fiscal deficits and implementing unsustainable entitlements.(See Above). Primary among these will likely be tax increases that will quell our global economic leadership, and inflation. Maybe Mr. Frank should focus on shoring up our fiscal soundness before imposing new regulation on business.
-Risk is what our political and economic model is founded on (John Adams airs on HBO Sunday nights at 9:00). Risk-takers are both rewarded and punished. I think that it is safe to say that the economic expansion we've experienced over the last 20 years is a direct result of financial institutions, corporations, and small businesses willingness to take risks. This includes: Bill Gates borrowing from a bank to start Microsoft, Citibank's willingness to help create mortgage backed securities that have allowed many of us to own homes, and an entrepreneur in Ohio using his retirement savings to start a new small business. If the government gets in the business of determining what appropriate risk is, the economy will likely cruise at the same pace the Social Security Trust Fund is growing...not by much.
What Frank fails to recognize is that there should be consequences associated with one's actions. If you're Bear Sterns and you over levered your balance sheet your choice was to hyper-inflate your earnings and at the same time hyper-inflate the probability of bankruptcy in a downturn. The just punishment for Bear's action was the erasure of about $7.5 Billion of shareholder wealth. This is exactly the same sort of punishment real estate speculators are experiencing as the value of their bets go south.
Last but not least, Wall Street is a beacon of innovation and is constantly creating new products and securities. How does the government plan on quantifying risks that have never been seen before?