ISiddiqui, I'm enjoying the conversation- I don't often say that about the political ones on the board
Anyways, how did the part of Gramm-Leach-Bliley that ended Glass-Steagall help the economy (i.e. prevent 2001 recession and cushioning this one)? I guess one could argue that those large banks had something to cushion their fall (i.e. their lending banking business) when the investment side fell apart. But I'm not sure if that's what you were getting at.
That said, I would argue the creation of "too big to fail" megabanks is a much worse development for the economy than anything that could have happened if we taken the other road in 1999. I think these risks wouldn't have been taken in so heavily by major players.
(Then again, I'm an advocate for the government nationalizing the lot of them, breaking them up, and then putting them back out onto the market- which definitely has its own substantial problems)
SI