"Because they'll screw it up!"

Yes and Not Yes:

One of the books I’m currently reading is The Partnership by Charles Ellis, which is basically a history of Goldman Sachs. The quote in the title comes from the chapter that describes the period of time in Goldman’s history where there were two leaders, John Whitehead and John Weinberg. After Gus Levy died, the two Johns agreed with each other to become co-senior partners of the firm.

As leaders of the firm, it was part of their job and duty to worry about competitors. One example was the commercial banks. According to Ellis, one of Whitehead’s major accomplishments “was his successful lobbying to extend the life of Glass-Steagal, the federal law that kept the commercial banks out of the securities business for decades.”

Of course, this was in the firm’s self-interest to prevent competitors from intruding upon their market, but there was also another reason that is extremely salient at this current stage of financial history.

“Why is the firm so worried about commercial banks getting into our investment banking business?” Weinberg supplied the answer to his own question, “Because they’ll screw it up!”

Now, can anyone argue that the repeal of Glass-Steagal was a good thing? Well, to put it in a Yogi Berra-type of description, I think the repeal of Glass-Steagal was good until it became bad. Certaintly, the financial problems we are experiencing today would be smaller if Glass-Steagal had not been repealed.