Once out of the bottle, the spirit of the Glass-Steagall Act is going to be hard to put back, particularly when it's the Financial System Inquiry chairman David Murray who's suggested that Australian banks' retail operations could be separated from their investment banking operations - and not for the first time in his career.As Professor Thomas Clarke, from the Centre for Corporate Governance at the University of Technology, Sydney, explained in an article written for The Conversation, there have been several recent post financial crisis commissions and inquiries in many jurisdictions - notably John Vickers' Independent Commission on Banking in the UK, the European Commission's Liikanen Report, and the 14,000-page Dodd-Frank Wall Street Reform Act in the US (which included the 882-page Volcker Rule).All of these reports and proposed rules have argued for some form of mandatory separation of high-risk trading activities, or the "ring-fencing" of proprietary and third-party trading activities without breaking banks up. The "carefully cultivated mythology", Clarke suggests, is that, while such structural reforms concern regulators in the US, UK and Europe, the Australian banks sailed through the financial crisis so there's no need for rules like that here.That's to ignore the Reagan administration's enthusiasm for deregulation, and the over-confidence of the Clinton years, in which an already diminished Glass-Steagall was finally abolished. Governments convinced themselves that lightening the burden of regulation was the means to promote more dynamic financial markets and business development.In fact, the US conglomerate banks, including Citibank, JP Morgan, Goldman Sachs and others (now known as systemically important financial institutions), have grown even larger since the financial crisis, thanks to further consolidation in the industry.Though passage was finally achieved in December 2013, the outcome of this legislative initiative remains in doubt. Meanwhile other countries are considering splitting up the banks.Frustrated at the lack of progress, last year four US senators, including Harvard law professor Elizabeth Warren and conservative John McCain, proposed a "21st Century Glass-Steagall Act", which received 600,000 signatures in support."In Australia we need to dispel the notion we live in the best of all possible banking worlds, and begin the process of separating retail from investment banking, to prepare for the shocks of the future that the international financial system is no doubt gearing up to provide," Clarke concludes.