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Glass-Steagall Act |
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Glass-Steagall Act 1933 legislation prohibiting commercial banks to own, underwrite, or deal in corporate stock and corporate bonds.
Glass-Steagall Act Legislation in the United States, enacted in 1933, intended to restore confidence in the banking system. Among its most important provisions was the creation the FDIC, which provided insurance on bank deposits up to a certain amount. The act also prohibited bank holding companies from owning brokerages or certain securities. This provision was designed to prevent banks from engaging in most investment activities and thereby to reduce the risk they carried. Most of the Glass-Steagal Act was repealed by the Gramm-Leach-Bliley Act in 1999. Glass-Steagall Act What Does Glass-Steagall Act Mean? An act passed by Congress in 1933 that prohibited commercial banks from collaborating with full-service brokerage firms or participating in investment banking activities. Investopedia explains Glass-Steagall Act The Glass-Steagall Act was enacted during the Great Depression to help protect depositors from the additional risks associated with security transactions. The act was dismantled in 1999. Consequently, the distinction between commercial banks and brokerage firms has blurred. Today, for better or worse, many banks own brokerage firms and provide investment services. Related Terms: How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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The American Bankers Association applauded Thursday's announcement, which could unlock reform legislation in Congress that would repeal the 1933 Glass Steagall Act separating banks from securities firms. Responding to the repeal of the Glass Steagall act, a volatile market and changing consumer demands, online brokerages around the globe are adopting a convergence strategy that includes adding banking services to their product portfolio, says a new report from Meridien Research. Cohen explained that even though the Glass Steagall Act is still on, the industry is striving to offer one-stop shopping, with commercial banks becoming involved in investment banking and with investment banks granting credits. |
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