Yet the breadth and depth of the financial breakdown suggest that it has much deeper roots. In many respects, this crisis was the culmination of fundamental shifts in both the organization and regulation of financial markets that began in the 1970s.
The New Deal reforms of financial regulation, themselves spawned by a systemic crisis, had separated commercial banking from investment banking, cured the problem of commercial bank runs by providing federal deposit insurance, and brought transparency and investor protections to trading and other capital markets activities.