Already the long reach of Dodd-Frank into muniland is having an effect. Al.com tells the story (emphasis mine):
Stockton, California is in the early stages of their bankruptcy and a local grand jury polled current city council members about their understanding of public finance. Does the latest round of public servants have any knowledge municipal finance? No, sadly the San Joaquin County Grand Jury discovered that there was little understanding of the city finances that the council oversees and that they could easily repeat prior mistakes. Local ABC affiliate, News10, reports (emphasis mine):
Having spent almost a year on Capitol Hill when the Dodd-Frank financial reform bill was being debated and drafted, my antenna goes up when an industry trade group praises something done by Congress. It’s usually a sign that the trade group was successful at getting their points of view adopted into law. I’m much happier when trade groups are screaming and kicking about provisions of the law, such as the new rules for derivatives trading and reporting.
Would resuscitating a Depression-era banking law strengthen the financial system that we have today? There are many, including me, who believe a reinstatement of Glass-Steagall would help separate the risks of high-velocity, high-volume securities speculation from the pedestrian activity of holding retail deposits. Often forgotten in the discussion of Glass-Steagall is the law’s primary accomplishment: the creation of deposit insurance through the FDIC, which promptly ended the recurring curse of mass withdrawal of retail deposits during financial crises. My grandparents lost all their savings in the banking crisis of 1933. In the wake of Glass-Steagall, the idea that their bank deposits were insured must have seemed like a miracle to them. This act established confidence in the banking system among everyday savers.