An efficient regulatory policy should provide avenues for a spectrum of risks and rewards, make it clear that regulation by itself does not guarantee risk-free transaction and ensure that overall benefits to the system are commensurate with the overall costs incurred.
All failures of a regulated unit do not represent failure of regulation and a regulator cannot guarantee compensation for those affected by failures other than those covered by deposit insurance. But, a regulator has to maintain the credibility in terms of assurance of systemic stability and consumer protection, especially in terms of information availability in a timely and transparent manner particularly to retail customers.