The repeal of Glass Steagall was widely supported by the banks and bank holding companies who were prohibited from competing with the investment banks in a lot of businesses. The investment banks were permitted to lend money, but without any of the prohibitions and regulations that applied to the banks. The guy that steered Glass-Steagall's repeal thru Congress was Senator Phil Gramm of Texas, who later retired to become Vice Chairman of the United Banl of Switzerland, a post he still holds. Gramm also got legislation passed a year or so later which contained what is known as the "Enron loophole", and is thought to have permitted much of the activity which lead to the Enron liquidation to occur. Interestingly, Gramm's wife was serving on the Enron board at the time, and has been named as a defendant as having complicity in much of the business activity which resulted in Enron's failure.

Had Glass-Steagall remained in force, it is unlikely that the banks would have been involved and so badly effected as they were in the 2008 financial collapse. Interestingly, I saw one of the CNN financial reporters interviewed this afternoon regarding the proposal for new regulations proposed by the President. He was generally very favorable and commented that if these regulations been in force, it is unlikely that the bank failures that occurred would have happened. He also opined that the recession that we're experiencing would likely have been shallower and shorter than it's turned out. I found his commentary pretty encouraging.