Don't believe it. That was when the Gramm-Leach-Bliley Act (GLBA) was passed, after decades of lobbying by some of the largest financial institutions. It repealed part of the Glass-Steagall Act of 1933, thereby opening up the market for mergers among banks, brokerage firms and insurance companies.
The Glass-Steagall Act had previously prohibited any one institution from acting as any combination of an investment bank, a commercial bank, or an insurance company and had been working fairly effectively since the great depression by segregate essential banking functions and preventing "too big to fail" or the related systemic risk.
The history on GLBA (according to Wikipedia) is pretty bad, especially given the results, and it should have been forseen:
"Prior to the Act, most financial services companies were already offering both saving and investment opportunities to their customers. On the retail/consumer side, a bank called Norwest which would later merge with Wells Fargo Bank led the charge in offering all types of financial services products in 1986. American Express attempted to own almost every field of financial business (although there was little synergy among them).
Things culminated in 1998 when Citibank, merged with Travelers Insurance creating CitiCorp, the largest and the most profitable company in the world. The merger violated the Bank Holding Company Act (BHCA), but Citibank was given a two-year forbearance that was based on an assumption that they would be able to force a change in the law. The Gramm-Leach-Bliley Act passed in November 1999, repealing the BHCA and portions of the Glass-Steagall Act, allowing banks, brokerages, and insurance companies to merge, thus making the Citigroup/Traveler Group merger legal."
So, rather than creating an even bigger mess with a "systemic overhaul," why not just start by repealing the ill conceived legislation (GLBA) that got the "too big to fail" ball rolling in the first place.
Of course that won't happen because creating huge new legislation and ramming it through under threat of dire consequences is too big of an opportunity to shift the playing field for any legislator to pass up.
