Such combinations of investment banks and commercial banks have little to do with the current problems on Wall Street, said Powell Goldstein banking partner Walter G. Moeling IV. Instead, the problems have been caused by the problems associated with subprime mortgages and an increase in loan defaults.

'The subprime problem was driven by Wall Street firms that needed a product to sell' in securities tied to subprime mortgages, Moeling says. 'The Democratic political left love the idea of home-ownership, and the Republican political right love the idea of making money off home-ownership. It was a perfect marriage where nobody wanted to say uncle or that the king had no clothes on.'

The vast amounts of money that had been flowing into subprime mortgages masked more widespread problems in the real estate market, Moeling says.

'So long as the excess subprime money was flowing to speculators, houses were being sold and homebuilders were getting loans to build,' Moeling said. 'That has nothing to do with the separation of commercial and investment banks' by Glass-Steagall, he says.