These laws, and their enforcement by the Securities and Exchange Commission, address many of the safety and soundness and conflict-of-interest concerns about affiliation of commercial and investment banks. I note that most of these important protections were not in place when the Glass-Steagall Act passed in 1933.
Thus, although proponents of high firewalls frequently cite the subtle hazards of affiliation discussed in the legislative history of that Act, the regulatory environment was far different then. I believe that the drafters of the Glass-Steagall Act would have had a very different discussion -- and passed a very different Act -- had today’s statutory and regulatory protections been present in 1933.