GLBA set the framework for the mega-financial institutions (which are now going broke)

I lived as a banker trying to make a living with a big bank which was constrained by Glass-Steagall. The legislation dated back to the post-depression years and really were badly out of date. Yes, the elimination of Glass-Steagall permitted commercial banks to compete in businesses otherwise prohibited, like stock brokerage, securities trading, etc. But even with the elimination of the "protections" provided by G-S, the big banks are still heavily regulated by the Federal Reserve.

The end result, even until today, is that very few, if any, of the big commercial banks have failed as the result of the new businesses which were permitted by GLBA. Lehman, Bear Stearns, Merril, etc. all failed or had to be taken over. But they were investment banks and never were regulated. Washington Mutual is thought of many as a "bank", but really is a savings and loan association and not regulated in the same way as the commercial banks.

I'd disagree, Steve. The enactment of GLBA in 1999 has had more of a favorable effect on our banking system than negative. If you'll notice, none of the big commercial banks are reported to be participating in the proposed bailout as the result. In fact my former bank, JPMorgan Chase, is strong enough to have purchased both Bear Stearns and WaMu (at a deep discount, of course), thereby avoiding the need for the Fed or FDIC to take them over and liquidate them.