The American Enterprise Institute in Washington.

Is reinstating Glass-Steagall a good idea? Industry experts collectively said “no” during a Thursday panel discussion at the American Enterprise Institute in Washington. But that doesn’t mean the issue is dead politically.

“When we talk about the return to Glass-Steagall, I don’t think anybody is actually talking about going back to the Glass-Steagall Act provisions that have been subsequently changed,” said Oliver Ireland, a partner at Morrison and Foerster LLP.

“Nobody, for example, is talking about reinstating Regulation Q, that was finally knocked out in Dodd-Frank. … Even when I look at the Senate bill,” the 21st Century Glass-Steagall Act introduced in early April by Sens. Elizabeth Warren, D-Mass., and John McCain, R-Arizona, “it isn’t Glass-Steagall; it’s something different. It is separating banking from some other set of concerns rather than just investment banking,” such as insurance, securities or derivatives. “That seems to be premised on the theory that … these other businesses are risky and therefore you’re protecting the banks from the risk of those businesses.”

Also, remedying the “too-big-to-fail” element in reviving the Act, “trying to break up the big banks because the big banks had to get bailed out this last time around — big and small banks have gotten bailed out before,” Ireland continued.

“The idea of bailing out organizations isn’t limited to the big guys. The idea of ‘too-big-to-fail,’ while popular, doesn’t address financial crisis problems — these are asset quality problems.”

As to whether the proposals on the table will mirror the original Glass-Steagall Act, the “chances are zero,” Ireland opined.

The chances that Warren and McCain’s bill passes in the current administration, he continued, is “also probably zero.”

What proposals will we see on the table? Is somebody going to look at restructuring the financial system as part of the rollback of Dodd-Frank?

Within a week, Ireland said, “we expect to see the first report out of the Treasury, not the only report, following the Trump executive orders” regarding regulatory reform. “What’s it going to look like? Hopefully it’s going to try to adapt to the 21st century. But a return to Glass-Steagall is a discussion under using that as a term and not a realistic” goal.

But Norbert Michel, senior research fellow, financial regulations and monetary policy at The Heritage Foundation, stated: “I don’t share the optimism that this is a dead issue. I wish it was.

“I wish that I could share Oliver’s optimism for there being no chance of any new version of Glass-Steagall being implemented, but you’ve got it in both the Democratic and Republican party platforms, and it’s in the Republican Party platform largely because of the president of the United States;” Michel said, “one member of the Senate Banking Committee, who is co-sponsoring a bill to do exactly that; and the Banking Committee is chaired by a senator who is known for bipartisanship.”

Martin Baily, senior fellow in economic studies at The Brookings Institution, noted that while he has been a “general supporter” of Dodd-Frank, “it would be helpful, if we weren’t in such polarized times, to step back and say ‘how is Dodd-Frank working?” and look at what needs to be changed or done “more efficiently,” he said.

“Should we reinstate Glass-Steagall?” Baily asked. “My answer would be no. I don’t think the benefits are very great and the costs may be fairly high.”

If you look at the financial crisis of 2008, “these were not universal banks … but it doesn’t look as if being a universal bank particularly was a predictor that you were failing. So that really doesn’t suggest that the end of Glass-Steagall played a particular role in the most recent financial crisis.”

What if you were to “reinstate it anyway?” Baily asked. “It would be costly.”