In recent months, we've been tracking the growing chorus of lawmakers and financial experts who support reconstructing a wall between commercial banks and investment banks as a way of avoiding another financial collapse.  Such separation existed prior to 1999, as this comprehensive Bloomberg article explained:

Lawmakers in both parties, seeking to prevent future financial crises while soothing public anger over bailouts and bonuses, are turning to an approach that’s both simple and transformative: re-imposing sections of the 1933 Glass-Steagall Act that separated commercial and investment banking.

Those walls came down with passage of the Gramm-Leach- Bliley Act of 1999. A proposal to reconstruct them, made by U.S. Senators John McCain and Maria Cantwell on Dec. 16, would prevent deposit-taking banks from underwriting securities, engaging in proprietary trading, selling insurance or owning retail brokerages.

The Cantwell-McCain bill (co-sponsored by Sens. Russ Feingold, Barbara Boxer, Bernie Sanders, and Edward Kaufman) will be one to watch early next year.  While many on Wall Street insist -- not surprisingly -- that re-enacting Glass-Steagall would be catastrophic to the industry's competitivess, there are others in the banking sector who wholeheartedly support such a policy.  The most recent to surface is Guy Hands, founder of the private equity firm Terra Firma Capital Partner.  Here's what he wrote in a December 21 letter to his investors:

For some time now, a number of us have been arguing for a Glass-Steagall [sic] like separation of utility banking operations from high risk, high profit, investment banking operations.  So, now that there is a consensus that the largest financial insitutions cannot be allowed to fail, it seem extraordinary to me that such a separation is not supported by all. ... It cannot be right to continue with a system which allows risk to be taken in the knowledge that, if things go right, bankers will take on average 60-80% of the profits generated through compensation and, if they go wrong, shareholders and ultimately the government will pick up the costs. ... The separation of the activities of investment banks and that of lending banks would allow more appropriate regulation and supervision and at the same time enable each group to go about its respective business without posing undue risks and potential costs to society.

Meanwhile, here in Illinois, we've found only one federal candidate -- Jacob Meister, Democratic contender for U.S. Senate -- who has explicitly supported reinstating such separation.

Once again, if you're interested in learning more about the issue, check out the recent Frontline documentary "The Warning."