Indeed. Preventing financial panics is one of the core purposes of modern government, the protestations of HN's resident Ayn Rand readership notwithstanding.
How is that working out? Booms and busts are inherent to a market, but with Keynesian policies we extend the busts and inflate artificial booms (see: housing crisis), and we rack up more debt every time.
From your own article, sounds like the problem was corrupt government, not a government that protected and prosecuted fraud.