And interestingly almost all politicians of all hue and color and with capacity to do something seem to be siding with them.
Most of the activities the banks were carrying out that contributed to the crash were well known long before the crash, and were not illegal and they weren't being called out for it. In fact many politicians and the public were keen for broader availability of cheap loans. So yes, we need better regulation of financial institutions, but there were many causes of the financial crisis and blame lies in many places and many lessons learned, but you can't apply laws retroactively or arbitrarily.
In an attempt to accomplish this, Elizabeth Warren has drafted a reasonable, 21st century take [1] on Glass-Steagall, which Senator Sanders supports.
[1] http://www.warren.senate.gov/files/documents/21stCenturyGlas...
This is not something which occurred during the GFC. We saw:
1) A significant number of pure retail banks making bad home loans, failing, and losing their depositors money. (Eg, Countrywide.)
2) A small number of pure investment banks (or in one famous case, an insurance company) getting on the wrong side of volatile markets or making exotic bets that went bad, and losing their investors money. (Eg, Lehman.)
3) A number of diversified banks which got into trouble on one side or the other, but were able to weather the storm without significant losses. (Eg, Citi.)
What we did NOT see is any large banks which got into trouble on the investment side, and lost money on the deposit side.
2) The Insurance company you allude to is likely AIG, who decided to provide industry wide insurance for the CDO which were themselves intended to distribute risk, which basically de-distributed the risk by rolling it up under their own single company. Lehman Brothers was a victim of apparent politics as to why they weren't bailed out while others were?
3) Citi required $20 Billion in taxpayer assistance via TARP. I don't know about you but that doesn't sound like weathering the storm.
I don't think you really understood what happened or have a very clear idea of the facts of the situation given your stated points.
2) AIG was not doing anything that Glass-Steagall would prevent. The fact that your 20/20 hindsight says it created a systematic risk doesn't change this.
3) Citi received $20B in TARP money, and paid it back quite rapidly. It's unknown how much in needed - many banks were forced to take unnecessary money in order to prevent identification of which banks were in trouble.
Also, why do you believe that preventing Citi from mixing retail and investment banking together would have prevented the (hypothetical multiple pieces of) city from requiring $20B?
1) Countrywide's primary business was mortgage lending, and it would have fallen on the retail side of the Glass-Steagall wall.
2) AIG had no retail banking, and would have fallen on the non-retail side of the wall.
3) Citi did not require the funds; banks were required to take TARP funds whether they needed them or not in order to avoid giving recipients a stigma. It later became clear that Citi (like other large integrated banks) did not need the funds, and they repaid them in full, with interest.
I'm not sure what point you're trying to make. The Glass-Steagall wall split banks up into the kind of retail bank that fell over during the GFC and the kind of non-retail bank that ell over during the GFC, and banned the kind of integrated banks which survived the GFC. It would not have stopped either what Countrywide did, nor what Lehman did; it would have stopped what Citi did. Do you dispute any part of that?
Have fun competing in the global financial business with massive institutions from other countries.
Edit: removed a unintended global
\* Specific numbers obviously made up for illustrative purposes only.
If this were true, then the US banks should have weathered the financial crisis far better than Canada's (highly consolidated). That's the complete opposite of reality.
I don't care much for efficiency when it allows for the penalty-free violation of the law. Efficiency isn't the end all, be all metric.
I would support a legislation that says no bailout money to any private company ever. If something is too big too fail the investors would shy away from investing into it.