The Gramm-Leach-Bliley Act (GLBA) of 1999, also termed the Financial Modernization Act of 1999, was signed into law on November 12, 1999. At the time of its enactment it was hailed by supporters as an important step forward in the removal of the legal barriers between commercial banking and investment banking in the United States—a step that would strengthen both sectors.
A decade later, in the wake of the worst financial crisis since the early 1930s—followed by the worst economic recession since the early 1980s, possibly since even the 1930s—the GLBA has instead been flailed by critics as a major cause of the financial crisis of 2007-2009. These critics often call for a revival of the Glass-Steagall barriers that the GLBA eliminated.
A quite recent manifestation of this anti-GLBA sentiment is the so-called Volcker Rule, which would forbid deposit-taking financial institutions from engaging in proprietary trading for their own accounts or from operating hedge funds or private equity operations. . .