Me in 1985: The Glass-Steagall Act should be repealed.
Me in 1989: I’m not so sure about repealing the Glass-Steagall Act. Repeal would, in effect, extend the protection of deposit insurance to investment banks and other risky entities. Moral hazard is a real problem.
Me in 1996: It doesn’t seem to matter that much that they haven’t repealed Glass-Steagall. The Fed is relaxing restrictions on banks in any case.
Me in 1999: What? Did they repeal Glass-Steagall? I wasn’t paying attention.
Me in September 13, 2008: Whew! I’m sure glad they repealed the Glass-Steagall Act. My 1989 worries were not crazy but I did not see that counterparty risk would spread the safety net to risky entities in any case, with or without explicit merger.
Me next week: How are we going to stop all these consolidated financial entities from taking advantage of deposit insurance and other public sector guarantees?