Last week, we noted a rather somber anniversary: Ten years had passed since Congress and the Clinton White House enacted legislation overtturning the Glass-Steagall Act.  By dismanting this Depression-era financial regulation (which segregated commercial banks and investment banks), the new law helped paved the way for the wild derivatives trading among too-big-too-fail Wall Street Banks.  We further pointed out that various respected financial experts have proposed reinstating some form of Glass-Steagall as a response to the financial crisis. 

Now it looks like such a bill doing might surface soon in the U.S. House.  From an op-ed published today by Rep. John Conyers (D-MI):

The Glass-Steagall Act had a simple premise: America’s banking sectors and investment houses need to remain separate to prevent banks from gambling on the stock market with our savings. President Franklin Roosevelt knew that banks, like other institutions, could not be trusted to police themselves. After witnessing the widespread failure of financial institutions in the Great Depression. he recognized a firewall was needed between the casino on Wall Street and the private investment engines of Main Street

Unfortunately, we forgot this lesson. Without Glass-Steagall serving as a critical check on the power of banks, the floodgates of speculation were opened. The banks leveraged personal savings accounts to trade in exotic securities and assets. Banks, insurance companies, and investment firms merged at an astounding pace. No longer content to simply finance home mortgages, these new hybrids began creating and selling securities based off of the speculative value of shaky mortgages. The banks took on more risk because risk was profitable. No one paid much attention to what would happen when the speculation bubble burst. [...]

President Barack Obama’s chief outside economic advisor and former Federal Reserve Chairman Paul Volcker, Nobel Prize-winning economist Joseph Stiglitz, and Nouriel Roubini, the economist who correctly predicted the financial crash, all agree that some form of the Glass-Steagall firewall must be restored if the architecture of our financial system is to be sound. That is why, in the coming weeks, I will introduce a modernized and updated version of the Glass-Steagall Act.

Once Conyers introduces his bill, we'll be watching carefully to see which members of the Illinois congressional delegation sign on.