glass-steagall

The author doesn't seem to realize that Glass-Steagall won't prevent commercial banks from making bad home loans.

The regulatory framework - I presume you mean Glass-Steagall - has never been shown to have been capable of preventing this sort of thing.

Historically speaking, Glass-Steagall was one (actually two technically speaking) of the most effective bills passed in the past hundred years.

Glass-Steagall prevented banks from running a trading desk, not from securitizing and selling their loans.

Glass-Steagall really kept companies from doing what they wanted to do, and got dropped.

Since Glass-Steagall restricted just a tiny subset of those conflicts, I'm wondering why you are so focused on it.

Many commercial banks traded MBS under Glass-Steagall as a way of reducing their risk; in fact regulatory bodies encouraged them to do this.

You are incorrectly conflating many activities, and assuming Glass-Steagall prevents all of them.

Slate also documents the banks going public, again prior to repealing Glass-Steagall.

No I am not talking about the S&L deregulation, I am talking about the Glass-Steagall act.

It was assumed when Glass-Steagall was dismantled that the market would flush out excessively risky players because too much risk is bad for business.

Additionally the Gramm-Leach-Bliley Act of 1999 that removed the last vestiges of Glass-Steagall (the parts that are related to this argument) happened under Clinton.

Many commercial banks traded MBS under Glass-Steagall as a way of reducing their risk; in fact regulatory bodies encouraged them to do this." We are really getting into details here.

Glass-Steagall is specifically related to investment banking which is a whole other ball game, and to call the repeal of that act insignificant because it isn't that "big" is patently absurd.