Comment of the DayGramm-Leach-Bliley: "I think a major defect of Gramm-Leach-Bliley (Glass-Steagal repeal)...:
...is that it created merged investment banking - commercial banking - insurance industry with un-merged fragmented regulators.
This lead to, for example, AIG Financial Products being regulated by the Office of Thrift Supervision. Firms could, in practice, choose their regulator manipulating the complicated rules for deciding which agency regulated what (as in buy a tiny S&L in order to be regulated by the Office of Thrift Supervision AKA the one with the chain saw http://krugman.blogs.nytimes.com/2008/03/22/hiding-behind-the-invisible-hand).
Since the regulatory agencies were financed by fees paid by the banks and banklike firms they regulated, there was a race to the bottom with the winner the agency which regulated least. This actually had something to do with the crisis (hmm where did I read about AIG Financial Products ?).