John Grapper of the Financial Times (tx Mary Bottari) suggests that we actually need to break up financial firms by keeping separate three kinds of banking. The mixing of these different kinds have helped the largest banks balloon incredibly in size ever since they were allowed to do so and has also helped balloon the size of the industry itself to obviously unsustainable levels. Too-big-to-fail not only is a culmination of our personal accounts getting mixed up with riskier investments, they also came to be because companies have had their hands in each other's pockets in a variety of complex ways. Our deposits should just get out of that scene. The Glass-Steagall Act was passed during the Great Depression by FDR to address a major reason for the crash of '29 -- a mixing of commercial banking with investment banking in the same company. FDR saw to end that, now perhaps we can take to a more modern version, see below:

"My colleague John Kay has described this as splitting banks into utilities and casinos – or deposit-taking banks that need to be backed by governments and investment banks indulging in proprietary trading that do not.

I think a more logical division would be a three-way split into utilities, casinos and people who visit casinos to gamble. That means retail banks, investment banks and asset managers, including private equity and hedge funds.

It may sound like a three-way split rather than a two-way one is a fine distinction. Yet it matters because this mix of businesses is what many too-big-to-fail institutions contain, with all the conflicts of interest and systemic problems it creates."

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