The Economist hits this one dead on! The article addresses the IMF's views on the financial collapse, which favors increased regulation as a response. The IMF proposes regulating based on the activities of the entity, not the entity itself (so include hedge funds that act as financial institutions the same as banks). From the accounting perspective this is classic rules-based versus principles-based.
At the end of the day, adding more regulations (like adding more rules in accounting) just means that institutions will find different ways to game the system. For instance, create a rule that causes a hedge-fund to be regulated like a bank if they receive over x% of their income from bank related activities and you'll be amazed how many hedge-funds suddenly receive x-1% of their income from bank like activities. It's always the same when you add regulation...you're still a step behind.
See the IMF's report here.