I think Lewis' point is that regulation we have today has gotten into a position of disguising real risk when it should be exposing risk so it can be fixed quic

I think Lewis' point is that regulation we have today has gotten into a position of disguising real risk when it should be exposing risk so it can be fixed quickly. If we don't have failure and risk then the market can't work. The liberals want more regulation while the libertarians want less. If we had regulation that could drop MBIA's triple A score when it started doing more risky investments, or a SEC that investigated fraud when someone basically handed them all the facts that they needed to validate then wouldn't those problems be contained to a much smaller impact? What I hear Lewis saying is that we are over-regulated with ineffective regulation. All the institutions are there, but they don't really do anything to protect the markets from financial meltdowns like these. If you're still asking what are the weaknesses of the system, and what are the points of failure I'm not sure you read the article.