In his 2009 diagnosis of the most recent financial crisis, The Failure of Capitalism, [Richard] Posner concluded that the fundamental problem with free market capitalism is that behavior which is perfectly rational when pursued by individuals, and individual firms, is disastrous when that behavior is aggregated across the entire society...
The "rational maximization" of businessmen and consumers all legally pursuing their self-interest, together and intelligently, within a framework of property and contract rights, was all it took to "set the stage for economic catastrophe."
It's this "rational indifference" to the consequences of one's own business and consumption behavior, which is an indifference baked into the very nature of the "free" market itself, that explains why government has a duty to do more than merely prevent fraud, theft and other infringements of property and contract rights, even though this "is the only duty that libertarians believe government has," as Posner says.
Government also has an obligation to regulate financial behavior, says Posner, for without such regulation "the rational behavior of law abiding financiers and consumers can precipitate economic disaster." link HT Ritholtz.