There's a fair bit to unpack there. It used to be that savings & loan type banking couldn't mix it up with serious financial engineering. Then the rules govern

There's a fair bit to unpack there. It used to be that savings & loan type banking couldn't mix it up with serious financial engineering. Then the rules governing these things were broken down, and retail banks started taking on more and more fancy (and risky) investments. That's the kind of stuff that eventually led to the bailouts. But I don't think it can be stressed enough that "getting too wild" meant getting involved in a lot of capital markets that were traditionally firewalled off from savings & loan banking. Holding up what happened to the banks during the financial crisis as an argument for savings & loan banking being riskier than investing in the open market is a lot like telling people that, if they don't like the heat in the frying pan, they'd be a lot better off in the fire. (edit: totally mistyped in that last paragraph)