It would seem then that market failure in one doesn't directly imply market failure in another. A good explanation of the market failure inherent in much banking comes from Richard Posner:
A banker is not going to forgo a risk that should it materialize would wreck the economy, because his forbearance would have no consequence, as long as his competitors continued running the risk; it is a classic case of external costs, requiring government intervention.The whole article is here, it is mainly Posner arguing against pay caps for bailed out banks. I highlight this quote because although it seems reasonable for the financial industry I cannot think of a comparable example for the labour market. Is there a particular set of circumstances in the free market for labour that is set up in a similar Prisoner's Dilemma - type scenario of encouraging defection and worse outcomes for all? I am sceptical.
So again, although there may be market failure in the financial industry, it doesn't necessarily follow that market failure is inherent in every human activity. This is something to keep in mind when people associate financial market deregulation with all other forms of deregulation and general economic liberalisation. It may be true that these things are also bad (although I am not of this opinion) but to conflate the two is facile.
From The Standard article I linked:
Of course the (Wall Street Journal), being the free market cheerleader it is, totally approves of (the 90 Day Probation Bill) (yes, despite the current economic situation and its causes- one can only imagine what it would take to shake such faith).(The first two brackets are mine, the third is not.) I am not aware of an argument that claims that the contraction in available credit (which we assume is the cause of the crisis) was caused by overly fluid labour markets. If anything, this is exactly what we need to help us weather it.