Paulson Calls for "New Regulatory Architecture"

The wolf wants to design the hen house.

The former Treasury Secretary writes:

First, this will be a big, multi-year undertaking. The crisis has exposed serious flaws in many aspects of our financial system. There will be proposals for more effective regulations in areas ranging from over-the-counter derivatives and short selling, to the practices of financial institutions, investors, mortgage originators and credit rating agencies. We will need to reflect on the long-held premise that sophisticated investors have the wherewithal to look out for themselves and require minimal, if any, supervision.

Again how is it that government supervisors have superior vision?