Yup... If people are investing in the securities of banks and don't understand the (incredibly complex) regulatory environment those banks operate in... they ar

Yup... If people are investing in the securities of banks and don't understand the (incredibly complex) regulatory environment those banks operate in... they are going to lose their shirt. That being said, I don't think most banks are deliberately trying to put risk on the naive. They mostly just assume the buyers of the securities understand the situation. Even people inside a bank don't have a crystal ball on where things are going. A sophisticated bank investor can often see the situation more clearly than someone in the bank.