There's no need for a government to get into this kind of situation: in fact, we get very similar problems all over the place in companies that have limited government contacts.
What you describe is ultimately just a principal-agent problem. In a world where the banks have no government protection, it can still be positive for people working at the bank to do things that are very risky for the bank. We see companies do crazy things that hurt them, but help people that work for them all the time.
Saying it's the government's fault is like blaming greed, or capitalism, or the banks. It's just principal-agent problems all the way down.
What you describe is ultimately just a principal-agent problem. In a world where the banks have no government protection, it can still be positive for people working at the bank to do things that are very risky for the bank. We see companies do crazy things that hurt them, but help people that work for them all the time.
Saying it's the government's fault is like blaming greed, or capitalism, or the banks. It's just principal-agent problems all the way down.