Abstract- Regulatory capture in financial supervision does not receive enough attention, either academic or otherwise. This paper examines evidence concerning the knowledge base of regulators and their performance up to and including the changes implied by the dodd-frank and basel III reforms. It concludes that, on balance, the competence of regulators is the key variable in the regulatory capture of financial supervision. Further, current regulatory reform efforts do little to address the issue. This conclusion supports the idea that hard limits on the size and risk profiles of financial firms are more likely than misplaced confidence in regulatory authorities to prevent a recurrence of 2007/8 events. Keywords-regulatory capture in financial supervision; financial crisis; credit by instrument; political economy.