The Myth of Financial Deregulation
Prior to the financial deregulation of the 1980s, we had controlled banking. Banks' conduct was guided by the central bank. Within this type of environment, banks' profit margins were nearly predetermined, because the Fed imposed interest-rate ceilings and controlled short-term interest rates. Hence, the life of the banks was quite easy, albeit boring.
The introduction of financial deregulations and the dismantling of the Glass-Steagall Act changed all that. The deregulated environment resulted in fierce competition between banks.