Regulation or no regulation?

Last week, Dr K P Krinshan lectured our class. He argued that regulation is a priced good, the price is paid by the tax payers. He also made/ stressed the point that it is oversupplied in our economy.
But I am wondering, in case regulations are not as tight then people feel free to manipulate balance sheet and I/S. This eventually culminates into staggering mistakes, leading to financial crisis or market collapses. This mess is cleared up by government, with money which is nothing but tax money.  So no matter what route one takes, it is the tax payers money.
So isn't this is a futile debate? It is simply a question of choosing between a bumpy ride and a slow motion ride.