The head office of JPMorgan Chase rises over Park Avenue in midtown Manhattan on July 13, 2012 in New York City. As banks face scrutiny over questionable practices, Chris Farrell explains why breaking up some of our biggest banks would solve a lot of problems. - 

Jeremy Hobson: The LIBOR scandal comes on the heels of the monster JP Morgan trade-gone-bad, which has already cost the bank billions of dollars. And that comes just a few years after the subprime mortgage collapse in which nearly all the big Wall Street financial institutions took outsized risks were deemed "too big to fail" -- the banks were. So what can be done to keep these problems from happening?

Marketplace economics correspondent Chris Farrell joins us to discuss. Good morning.

Chris Farrell: Good morning, Jeremy.

Hobson: Chris, it's just scandal after scandal from these big Wall Street banks. What can be done about this?

Farrell: Well, I think we need to break them up. I really do. And there's a simple way to break up the big banks, and that is to dust off the 1933 Glass-Steagall Act. It's a very short piece of legislation, and most of us are pretty familiar with it. We're comfortable with the notion that we're going to separate this investment banking and this trading from institutions that take deposits from you and me. It worked for about 60 years.

Hobson: What about the argument, though, that some would make that if we break up our banks, there are still going to be these behemoth banks in the Netherlands and Switzerland and the U.K. that will be doing investment banking and consumer banking, and we'll just be at a disadvantage?

Farrell: I don't see the problem, because that was true for most of the post-World War II era. I mean, the universal banks of Switzerland and Germany -- and the U.S. grew to be the largest economy in the world. But we had a banking system that largely supported Main Street rather than Main Street having to support or do what happens to the financial system.

Hobson: Did we miss our opportunity to do big banking reform like this? I mean, we've already passed the Dodd-Frank financial reform law. Chris, that was a hard thing to get through Congress; it's very complicated. Didn't we miss our chance to do another big re-do of Wall Street banks?

Farrell: Jeremy, I'm not laughing at you, but I'm just sort of thinking, now look: We went through the whole Lehman Brothers collapse, now we've got the JPMorgan and its trading losses; now we have the LIBOR scandal. I mean, here's the thing: The banking industry is going to give us plenty of opportunity to embrace reform again. And what I would urge is let's make the change now before the next big scandal.

Hobson: Marketplace economics correspondent Chris Farrell. Thanks as always.

Farrell: Thanks a lot.

Follow Chris Farrell at @cfarrellecon