This is one area where I would like feedback from my readers. My view is that the repeal of Glass-Stegall had little impact on the crisis. Most of the crisis occurred as a result of ordinary failures in investment banking, and commercial banking, with little change from combining them.
I would argue that the overall model for investment banking failed. No major investment bank survived the crisis intact. Goldman Sachs and Morgan Stanley had to seek banking charters to survive and receive help from the Treasury/Fed (one entity, but like Janus, two faces). Everyone else needed help from the Feds, or failed, or merged.
I would also argue that the overall model for commercial banking failed, with many making loans that were horrendously underwritten.
So, what aspects of the crisis stemmed from the repeal of Glass-Stegall? Remember, the Fed was chipping away at it for some time. Feel free to comment below, but if you don’t want to do that, email me. Thanks.