It's Easy to Say 'Bring Back Glass-Steagall'Some of the people clamoring for the breakup of the nation's largest banks also think it would be wise to bring back Glass-Steagall's separation of investment banks from traditional commercial banks. The Federal Reserve was already taking a liberal approach to Glass-Steagall even before the Graham-Leach-Bliley Act of 1999 formally ended restrictions against investment banks affiliating with commercial banks.
Even after Graham-Leach-Bliley was passed, there were still several very large investment banks, or broker/dealers. Having them separated from commercial banks "didn't stop us from having the last financial crisis, because as we saw, the institutions under the greatest pressure were the independent broker/dealers, including Lehman Brothers, Bear Stearns and Merrill Lynch," says Guggenheim analyst Marty Mosby. "These companies didn't have enough liquidity or enough capital."