So where are the tough regulators that were supposed to come with all the bailouts? European politicians are now blaming the messengers that are telling them that their banking systems are done for. The so-called "stress tests" on European banks were absurd. They assumed, for example, that no European country will ever default! Well, if no European country will ever default, then what's the problem?
Politicians are all for regulation -- unless you need it. Then, the politicians no longer want regulation. Witness the attack by European politicians on the rating agencies. Now that the rating agencies are doing their job, the politicians are angry. Go figure.
If there were no regulatory bodies at all and no European Central Bank (ECB), then, by now, markets would have reigned in the excesses of the PIIGS countries by denying them new funding. Eliminating new funding is, in the end, the only solution to Europe's woes. The market could have done that easily, but governments prefer to live in denial. A similar "denial" policy prevails in the US, but, fortunately, there is no one around to bail out the US, so when the markets finally say "no mas," that will be that.
The outcome of all of this is perfectly predictable. The only issue to be decided is the date when all of this comes crashing down.