Barry Eichengreen pointe this out to me yesterday, and I could have blogged it first if I had been smart.
Aren't you sort of glad Congress repealed Glass-Steagall?: Was deregulation a factor in bringing us to our financial system to its current teetering state? Yeah, sure. But the deregulatory decision most often cited by lefty (and not so lefty) observers--the 1999 repeal of the Depression-era Glass Steagall Act that had separated depositary banking from investment banking--is actually looking pretty good this Monday morning. Without Glass-Steagall repeal, Bank of America wouldn't be able to buy Merrill Lynch, the only bit of arguably positive news to come out of this crazy weekend. And more generally, it is looking like investment banks that don't have big consumer banking franchises aren't up to the challenge of surviving modern-day financial crises. Of the five big independent investment banks that existed six months ago, only two survive.
Now it is true is that we failed to replace the archaic Glass-Steagall rules with a sensible, modernized regulatory structure. But don't worry, we'll be getting to that soon enough!