When I became inside counsel for a commercial bank in 1977, I never imagined the changes coming to the industry or that it would be front and center 30 years later in the most serious economic crisis since the Great Depression. I have been thinking about how regulatory changes over these three decades may have contributed to our current predicament, and what lessons can be learned.

Commercial banking was fairly simple in the 1970s. Banks were generally hemmed in by the Douglas Amendment of the Bank Holding Company Act to branching in a single state. On the product side, they were regulated most notably by the Depression-era Glass-Steagall Act. Banks made bread-and-butter loans to consumers and businesses and offered deposits subject to mandated maximum rates of interest.

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