The idea that the 1999 repeal of the Glass-Steagall Act, which had mandated the separation of investment banks and retail banks, was a major factor in the financial crisis is rebutted by H. Rodgin Cohen, chairman of the law firm Sullivan & Cromwell, in an interview with the Daily Deal. He says that Lehman, Bear Stearns, Fannie Mae and Freddie Mac, Washington Mutual, and Wachovia all had nothing to do with Glass-Steagall. "Much of the problem was the unregulated mortgage bankers and brokers, who ultimately polluted the system," he said. He's probably right about Glass-Steagall, though it's worth remembering the history, which is that Glass-Steagall wasn't just an arbitrary restriction on banks, but the law that created large-scale, permanent federal deposit insurance. If the federal government is going to guarantee bank deposits, there's certainly a case to be made that it can reasonably impose some restrictions in return on what kind of gambles banks can make with the depositors' money. If a bank wants to opt out of the deposit insurance, and with it the restrictions, that is one thing, but accepting the deposit insurance while bridling at the restrictions is another thing. It's true that a lot of the mortgages that went bad were originated by mortgage brokers that aren't regulated in the way that banks are, but those brokers then sold off those mortages to the big banks and financial institutions that are Mr. Cohen's clients. Those firms made a lot of money on fees securitizing those mortgages and selling them and, until they went bad, holding them on their own balance sheets. To depict all those big banks as a bunch of naifs, victims of pullution by the unregulated mortgage bankers and brokers, is a stretch.