Following the Great Depression, large "universal banks" were broken down to separate commercial and investment banks giving rise to the giants of Goldman Sachs and Morgan Stanley, among others.

Amid the current economic crisis of the past week many of these investment banks are being folded back into large commercial banks.

In this video NewsHour economic correspondent Paul Solman and New York University's Richard Sylla give background on some of the conditions that led to recent banking failures and summarize some of the similarities and differences between the current financial crisis and the Great Depression.

Similarly to the period after the Great Depression, Sylla predicts that the financial system will have to undergo regulation reform, this time looking specifically at the instantaneous global financial system that we now have.

"It's similar [to the Depression] in that it's a worldwide crisis and there are many financial institutions in deep trouble. In the 1930s, 1930 to '33, we lost something like 7,000 or 8,000 banks. We have the potential to do something like that now, but I think we're going to avoid it." -Richard Sylla, New York University

"The Depression teaches us that the result of a major financial crisis is going to be regulatory reform. In the depression of the '30s, we ended up getting the FDIC deposit insurance, the Securities and Exchange Commission, regulations to promote mutual funds, various changes." -Richard Sylla, New York University

"The world has looked at us for years as the pioneers of financial engineering...Suddenly, it looks like not only did we overstep, but we can't even sustain that system. We're going to close that system down. That would seem to me to be a huge, huge change in America's economic position in the world."- Paul Solman, NewsHour correspondent
Initiating questions

1. What was the Great Depression? What caused it? What are some of the lasting effects of it?

2. What is an investment bank? What makes it different than a bank where you might have a savings account?

1. How is the Great Depression similar to the current crisis? How is it different?

2. Is this current crisis affecting you or your family? How?

3. How big of a role do you think the government should take in regulating the financial system? What are some pros and cons of government regulation?
4. Aside from banking, name some industries that the U.S. government is involved in regulating. Can you name some industries that regulate themselves? Do you think it is a good idea for the government to regulate those industries?