It was a work in progress

Paul Krugman --

“This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. ... All in all, I think we hit the jackpot.” So declared Ronald Reagan in 1982, as he signed the Garn-St. Germain Depository Institutions Act.

He was, as it happened, wrong about solving the problems of the thrifts. On the contrary, the bill turned the modest-sized troubles of savings-and-loan institutions into an utter catastrophe. But he was right about the legislation’s significance. And as for that jackpot — well, it finally came more than 25 years later, in the form of the worst economic crisis since the Great Depression.

What else Pres. Reagan said when he signed the bill --

Unfortunately, this legislation does not deal with the important question of delivery of other financial services, including securities activities by banks and other depository institutions. But I'm advised that many in the Congress want to put this question at the top of the banking deregulatory agenda next year, and I would strongly endorse such an initiative and hope that at the same time, the Congress will consider other proposals for more comprehensive deregulation which the administration advanced during the 97th Congress.

In other words, a critical ingredient of deregulation i.e. allowing commercial banks to engage in investment banking activities, did not come with the bill and in fact did not come in Reagan's term at all. This probibition ("Glass-Steagall") was undone through case-by-case waivers until eventually being formally abolished by Gramm-Leach-Bliley in 1999.

Krugman makes the strange choice to zero in on what was essentially a legislative painkiller for a terminally ill patient (fixed rate lenders with variable rate costs) when there was a much broader philosophy at work, dominating "mainstream" political consensus for 25 years, that got us in the shambles we're in today.