President Franklin Roosevelt at the White House, Washington on August 23, 1935 as he signed the Glass-Steagall Banking Bill. AP Treasury Secretary-designate Steven Mnuchin touted the revitalization, with tweaks, of a decades-old regulation on banks repealed nearly twenty years ago during his confirmation hearing on Thursday.

Last July, Republican National Convention delegates approved a platform that supported reinstating the Glass-Steagall Act. It was passed in 1933 and required banks to separate commercial deposit banking from investment banking.

Democratic Senator Maria Cantwell asked Mnuchin whether he supported a return to the act.

"I don't support going back to Glass-Steagall as is," Mnuchin told the Senate Finance Committee. "When we talked about policy with the president-elect, our view is we need a 21st century version."

The act was repealed in 1999, enabling the rise of mega banks like Citigroup and JP Morgan that serve both small checking accounts and million-dollar investment portfolios. Some economists have argued that the act repealing Glass-Steagall nurtured some of the risky behavior among banks that led to the financial crisis.

Mnuchin said the problem with regulation is a lack of clear understanding of what is proper and improper. He said he supported the Volcker Rule, which was enacted with the Dodd-Frank Act after the 2008 financial crisis and limited how much speculative investing banks can do.

"I support the Volcker rule, but there needs to be proper definitions around the Volcker rule so that banks can understand exactly what they can do and what they can't do, and that they can provide the necessary function of liquidity in customer markets," Mnuchin said.

He cited a paper from Federal Reserve staff released in December that found that the Volcker rule had a negative effect on corporate-bond liquidity, or the ease with which buyers and sellers can find each other.

"Separating out banks and investment banks right now under Glass-Steagall would have very big implications to the liquidity and the capital markets and banks being able to perform necessary lending," Mnuchin added.

The research firm Compass Point said in December that the Trump administration could use the paper's findings as an argument to ease regulation on Wall Street.