Fannie and Freddie have been "regulated" even more so than private institutions - from the beginning of their existence they were not private enterprises, they were partially "privatized" later as GSEs. Their mandate was to make and facilitate loans, that was the extent of their "regulation" and last year they had more than half of all mortgages in US, many of them at lower standards than were practical for most normal banks loans, which made it easier to qualify for loans. Bush wanted to change the structure and "regulations" governing GSEs specifically because they became potentially huge liability which were (for all practical purposes) guaranteed by faith and credit of Federal Government (while at the same time being a piggy bank and slush fund for Democrats) yet could not get past Frank and Dodd who thought that kind of "regulation" was just fine. It wasn't lack of regulation in that case, it was too much of the wrong one, based on wrong policy and supported for decades for political reasons by Democrats.
Re 2004 SEC rule, it actually didn't affect "banks".
Do Goldman Sachs, Merrill Lynch, Lehman Brothers, Bear Stearns and Morgan Stanley sound familiar? - Yes, precisely because none of them was a commercial "bank", they were pure "investment banks" / brokerages unlike BoA, JP Morgan, Citi etc. which had brokerages merged with banks, and thus were regulated as banks, thus having lower leverage requirements ... Bear, Lehman are now gone, Merrill ingloriously fire-sold to BoA, and both Goldman Sachs and Morgan Stanley are now "banks" and have the same leverage requirements as other commercial banks (with or without brokerage component, e.g. Citi is slowly merging off their Smith Barney brokerage to Morgan Stanley).
Anyway, if one wants to argue that SEC (under William Donaldson, who BTW was a member of Obama's transition team) lowered leverage requirement because they wanted to incentivize investment banks to make more loans (otherwise they would hit the limit of how much they could lend without additional borrowing) then how could that be considered a "lack of regulation"? Again, it could be the regulation of the wrong kind - no surprise here! - promoting the lending process for the sake of broader home ownership, but it's a myth that the "regulation" failed, when in fact exactly opposite would be true - the regulating agency of the government made sure more loans would be available by encouraging and enabling institutions to make them. That's a failure of the same overall government policy or program, not failure of regulation of the institutions that faithfully followed and executed the policy, i.e. banks (commercial and investment) were "regulated" right into making more, lower quality loans and having to leverage themselves in the process.
Investment banks did exactly what regulators wanted them to do! Yes, leverage is very profitable on the way up, and it kills on the way down, as we saw with another crisis, brought on by LTCM failure in 1998, leveraged at about 100:1 at the time, with overall liability exposure of approximately $1T on $10B in assets. That regulators forgot about that in their zeal to increase home ownership by any means is not a "lack of regulation", "failure to regulate" or fault of the private companies that were "regulated" into it. Excess of regulations and ever-changing rules and laws, not the lack of them, was the most contributing factor in this fiasco. What could have been a manageable real estate bubble became a banking and financial system earthquake. And I am not even talking about CDS disaster which put the final nail in the coffin, but which is not regulated by SEC because it's considered "insurance", not a regular financial derivative.
BTW, not as well known, but in 2004 same SEC also allowed ProFund ETFs that, for the first time, used leverage. I am sure you may have seen some effects of that in the recent markets.
BTW, here is another, different argument on this subject that you may be interested in following (I didn't check validity of it, so would not care to argue it myself at this time): Robert Hansen's Blog: The 2004 Banking Leverage Rule Change
You are knocking down a straw dog
What is needed is proper regulation
Intelligent regulation
I suppose the libertarians want zero regulations
Like an NBA game with no referees because you all trust the innate intelligence and fairness in people. A major miscalculation. Libertarians I see are smart and fair people...they project this on other people. This can be fatal
http://robertghansen.blogspot.com/2009/02/2004-banking-leverage-rule-change.html
You should check the comments at that link to Hansen's blog.
They pretty much destroy Hanson's take on the SEC 2004 easing of leverage which absolves Wall St
I know what the history of the repeal of Glass Steagel was
It only came after titanic efforts by powerful Wall St entities especially Bob Rubin (Treasury) Larry Summers, Phil Gram, Sanford Weil at AMEX and CitiCorp. Citi really spent the most in lobbying.
I'll bet the 2004 repeal of leverage rules was the same
Those SEC directors are industry stooges or were pressured/bribed/bought off to act as such
IOW---- The 2004 SEC did what the financial industry demanded------ Not your scenario of the hapless idiots of Wall St leveraging to the moon because of the irresponsible SEC
If you want to find anti-industry regulators you should stick to the EPA. Just look at its efforts to kill coal. Look to OSHA enforcers who have killed many small businesses. Please include the racists at EEOC.
But the SEC is a joke. Totally in the pocket of powerful economic interests