> Basically, regulators don't have the balls to go after the big guys.
The other component to this, is that regulatory compliance becomes a significant barrier to entry for new firms. Incumbents end up gaining even more organizational power as market power increases, and competition on price and service quality decreases.
Goldman Sachs has even mentioned this as an advantage on earnings calls. The regulatory burden on the financial industry is insurmountable for a new entrant.
The other component to this, is that regulatory compliance becomes a significant barrier to entry for new firms. Incumbents end up gaining even more organizational power as market power increases, and competition on price and service quality decreases.