I’m not too familiar with the insitutional details of the regulation in the US, so you have to take my thoughts with a grain of salt. Generally I tend to agree: New regulatory agencies are generally not a precondition for decent financial regulation. Here in the UK the new government even downsizes the regulatory bodies: The Financial Services Authority will become a subsidiary of the Bank of England.

http://uk.reuters.com/article/idUKTRE65C37H20100613

Sufficient funding and good personell of course is a precondition, as you correctly mention. Even more important it the correct mindset of the politicans and the regulators. Prior to the crisis most policymakers in the US were convinced that the markets will allways get it right and that government intervention always hurt. My personal opinion is that the things Levine describes in his paper (and the financial crisis in itself) are the consequence of this mindset.

What I really find amazing is how little is know about how regulation actually works. (see http://olafstorbeck.com/2010/05/19/the-arcane-mysteries-of-banking-regulation/)