> So the impact that you dismiss completely is a matter of strong debate.

Not, in my view, among actual experts if you review the literature, but whatever.

> I think that that allowing mortgage originators with securities packaging underwriters into the same room in the same company has a lower degree of scrutiny than the same thing happening separately in two separate companies and separate products.

Great story, but you could just as easily tell a story about originators from one bank trying to stiff underwriters from another with toxic loans, while an integrated bank works together and doesn't make bad loans to start with. You need to look at what happened, not what plausibly could have happened.

So let's look at what actually happened with, say, IndyMac. As one history of of the crisis put it[1]:

> ...the terms of Glass-Steagall allowed banks to securitize their loans and sell them in that form, but they were not allowed to underwrite or deal in mortgage-backed securities (MBS). Banks could nevertheless buy MBS as investments and sell them whenever it suited their investment strategy, or when they required cash.

And then when discussing IndyMac:

> IndyMac [...] pursued an aggressive growth strategy. [...] The bank originated or bought loans, securitized them, and sold them to other banks, thrifts, or investment banks, but held the mortgage-servicing rights. [...] IndyMac concentrated on adjustable interest rate mortgages (ARMs), including ones in which the minimum payment did not cover the monthly interest payment; 75 percent of IndyMac’s borrowers were only making the minimum payment. IndyMac also specialized in Alt-A loans, which only required the minimum documentation verifying the borrower’s income — and sometimes not even that. These loans were very profitable for the company. [...] Crucially, IndyMac did not engage in any investment bank activity, and all of its activities would have been allowed under the original Glass-Steagall Act.

IndyMac seems to me to be an iconic example of the crisis; they were a pure-play retail bank that gambled heavily on originating extraordinarily crap mortgages which they then sliced, diced, and sold on to suckers. Some of those suckers ended up being pure-play investment banks like Bear Stearns or Lehman Brothers; when the crisis hit they all went under. All of which was bad! Much of it should probably have been illegal. Thankfully some of it is now illegal due to Dodd-Frank. But crucially none of this would have been prevented by Glass-Steagall, or was allowed by Gramm–Leach–Bliley. For good or ill, originating bad loans and then selling them to third-party suckers is simply not a thing that Glass-Steagall tried to prevent.

So when you say:

> I think that that allowing mortgage originators with securities packaging underwriters into the same room in the same company has a lower degree of scrutiny

I don't think that story seems to have much relation to IndyMac. My story - of independent originators dumping toxic waste onto an unsuspecting market - seems to have a lot more relevance.

[1] https://www.cato.org/publications/policy-analysis/repeal-gla... (Yes, a think tank, yes, with a bias. Check the facts before blindly trusting.)