Five Congressmen who voted against the repeal of Glass-Steagall in 1999 want to bring it back

Glass-Steagall, passed in 1933, prohibited commercial banks from underwriting stocks and bonds (among other regulations, such as establishing the FDIC) – essentially, keeping commercial and investment banks separate. The repeal of the act, proposed by Phil Gramm (R-TX) in the Senate and Jim Leach (R-IA) in the House, passed thanks largely due to Republican majorities in the House and Senate. It allowed already huge banks, like Citigroup, to become even bigger – “too big to fail” as some said during last year’s financial meltdown. It also allowed banks and bankers to get fabulously wealthy on exotic notions like sub-prime loans instead of making actual investments in real things.

The reinstatement of Glass-Steagall faces a fairly uphill battle as not even President Obama supports it.

These kinds of big-picture regulations strike me as a good thing and, knowing as little as I do about macroeconomics, are the kinds of regulations I’d like to see put in place. I’m curious what the arguments against reinstating Glass-Steagall are.