Stiglitz:

The Glass-Steagall Act of 1933, which separated investment banking from commercial banking, recognized the conflicts of interest that can arise when the two are conflated. But concerns about keeping them separate were put aside after the arrival at the Treasury Department of Robert Rubin, in 1995. The big banks saw getting rid of Glass-Steagall as an opportunity to become even bigger. Treasury argued that scrapping the law was of no consequence, because banks had learned how to circumvent it anyway. (If this had been so, the appropriate response would, obviously, have been to try to limit the circumvention.) Treasury also argued that it could address the conflicts of interest (which it admitted) by constructing barriers between the banks' partsâ€""Chinese walls," they were called. Of course, if such measures had worked, that would have undermined the most cogent argument for eliminating the formal separation in the first place. One cannot simultaneously claim that it is important that banks be integrated, to take advantage of what economists call economies of scope (the benefits that businesses can reap by working in many different areas), and also that it is important for the parts of a bank to be compartmentalized, to avoid any conflicts of interest. In retrospect it is clear that Chinese walls did not workâ€"or did not work well enough to prevent serious problems from arising. For example, banks continued to lend to Enron even as its problems began to surface; the profits the banks made (they got fees for Enron's deals) more than compensated them for the risk in lending.

But Sawzaw, It was the Bush's administration that eased the regulations and caused all this trouble, not Bubba's, right?