“Financial markets hinge on trust, and that trust has eroded.” The common notion that one should drive on the right side of the road makes it so. Is the idea that some particular institution is trustworthy make it so? I think not. Infinite Ponzi schemes are an oxymoron—they run out of fuel. I think that stochastic auditing could supplant trust of judgement, but not trust in honesty.
Government regulation may be the only way we know to address the 2008 problem but I suspect there is a distributed solution involving transparent rating of assets. It would require honest players, but not wise players.