Bank breakups on the way?

The American Banker points to European regulators' decision to break up ING and Britain's decision to force Royal Bank of Scotland and Lloyds to divest some big units as the beginning of a trend that may hit the US as well. Paul Volcker and even former Citicorp CEO John Reed have called for moving back to a Glass-Steagal style division between commercial banking and other financial services.

This seems like a good trend, but it's not a standalone solution to financial instability. The firms that took the biggest risks during the housing boom were investment banks like Lehman Brothers that were not affected by the repeal of Glass Steagal in 1999. But interesting nonetheless.