FDR recognized that our financial system -- and our economy -- depend on a stable banking sector.

When I speak of high finance as a harmful factor in recent years, I am speaking about a minority which includes the type of individual who speculates with other people’s money…and also the type of individual who says that popular government cannot be trusted…

High finance of this type refused to permit Government credit to go directly to the industrialist, to the business man, to the home owner, to the farmer. They wanted it to trickle down from the top, through the intricate arrangements which they controlled and by which they were able to levy tribute on every business in the land.

…They did not want Government supervision over financial markets through which they manipulated their monopolies with other people’s money.

And in the face of their demands that Government do nothing that they called "unsound," the Government, hypnotized by its indebtedness to them, stood by and let the depression drive industry and business toward bankruptcy. –Franklin D Roosevelt, 1936

The recent news that the nation’s largest bank, JPMorgan Chase, has lost $ 2 billion in trades over the past six weeks and is likely to rack up losses in excess of $3 billion before the dust settles has led to increasing calls for the resurrection of the 1933 Glass-Steagall Act. Passed in the wake of the 1929 financial crisis that led to the onset of the Great Depression, the Glass-Steagall Act established the Federal Deposit Insurance Corporation (FDIC), which virtually ended 1930s-style bank runs, and also separated commercial from investment banking as a further guarantee of the average American’s savings.

The latter provision was put in place because of the widespread consensus among lawmakers at the time that a) it would be a mistake to allow investment bankers access to funds that were guaranteed by the government, and b) that giving investment bankers access to federally insured deposits would undermine the whole purpose of the FDIC. The FDIC was meant to provide the average American and small business person with access to stable and secure banking services for savings, mortgages, and commercial loans. In layman’s terms, this meant that financial speculators would not be able to get their hands on working Americans’ money or mortgages.

Of course, much like today, a good share of the financial sector vehemently opposed those reforms. The president of the American Bankers Association, for example, insisted that the bill’s provisions for deposit insurance were “unsound, unscientific and dangerous.” But other prominent bankers, including Winthrop Aldrich, the president of the Chase National Bank of New York and precursor to JPMorgan Chase, argued in favor of the bill, including its call for the separation of commercial and investment banking. Aldrich even went so far as to insist that the “spirit of speculation should be eradicated from the management of commercial banks, and commercial banks should not be permitted to underwrite securities.”

Flash forward to today. The likes of former Citigroup Chairmen John Reed and Richard Parsons have admitted that the repeal of Glass-Steagall contributed to the 2008 financial crisis. The current Chairman of JPMorgan Chase, Jamie Dimon himself, has admitted that Chase made “a terrible, egregious mistake” in engaging in what he termed “sloppy” and “stupid” activity in the past six weeks. Isn’t it time we recognized that common sense regulation of the banking and financial sector is vital to the overall health of our economy?

Contrary to what free market fundamentalists have been telling us again and again this campaign season, the basic banking and financial structure that was put in place in the early years of the Roosevelt administration was not put in place to strangle the free market. It was put in place to protect the free market—and it did so with great aplomb for over half a century.

If we truly wish to restore the confidence and integrity of our financial system and protect ourselves from another financial disaster, then we will need to do more than merely instigate the Volcker Rule and the other half-measures contained in the 2010 Dodd-Frank Reform Act—half-measures, which we should note, Jamie Dimon and other titans of Wall Street have so vehemently opposed.

It would be far better to heed the advice of Elizabeth Warren, Robert Reich, and a growing number of economists and members of the business community that it is time to do what the British government is essentially about to do: resurrect the Glass-Steagall Act. Doing so would not only help protect the commercial banking industry from the vicissitudes of Wall Street. It would also reduce this size of the too-big-to-fail behemoths like JPMorgan Chase, who seem quite content to gamble with what FDR called “other people’s money” in their endless pursuit of greater and greater wealth and power.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.