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. The bill was effectively repealed by the Gramm-Leach-Bliley Act, November 12, 1999.

Glass-Steagal 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 Most of the Glass-Steagal Act was repealed by the Gramm-Leach-Bliley Act in 1999. It is formally called the Banking Act of 1933.

Glass-Steagall Act

A 1933 act that prohibited commercial banks from undertaking investment banking activities such as underwriting the securities of private corporations. The legislation was passed to keep banks from entering into nonfinancial businesses (for example, owning corporate stock) and more risky activities. The Glass-Steagall Act was repealed in 1999. Also called Banking Act of 1933.
References in periodicals archive ?
The 21st Century Glass-Steagall Act will rebuild the wall between commercial and investment banking and make our financial system more stable and secure.
Elizabeth Warren's proposed 2014 financial legislation, is that the 1999 "repeal" of the 1933 Glass-Steagall Act removed the restrictions that kept investment banks from using commercial bank deposits to speculate in an unregulated marketplace.
In 1927 the McFadden Act prohibited banks from doing business anywhere but in their original state, and in 1933 Congress adopted the Glass-Steagall Act, (3) which both set up the deposit insurance system (FDIC) and separated commercial banking from investment banking (IB).
Rather, conglomeration bred conflicts of interest in Weill's firms, and others - the very conflicts that the original Glass-Steagall Act was designed to prevent.
Hence, White concludes, the reimposition of Glass-Steagall Act rules separating investment banking from commercial banking would "not even be a case of locking the barn door after the horses have run out.
Also during his first term in 1933, Roosevelt signed the Glass-Steagall Act, which created the Federal Deposit Insurance Corp.
In addition to seeking the impeachment of Obama "for gross violations of the Constitution in the service of Wall Street imperialism," Rogers is calling for significant investment in manned space exploration to avoid "mass extinction of the human species" and for the reinstatement of the Glass-Steagall Act of 1933, which prohibited commercial banks from conducting investment business.
However, the watering down and ultimate repeal of the Glass-Steagall Act undeniably led to the repeat of banking institution's speculation with deposits and opened the floodgates for more erroneous legislation akin to pre-Depression era practices.
In the third broadcast, Moyers talks with former Citigroup Chairman John Reed , now chairman of the board of MIT, and former Senator Byron Dorgan , to explore how the mid-90's merger of Citicorp and Travelers Group brought down a crucial firewall between banks and investment firms -- the Glass-Steagall Act, which had protected consumers from financial calamity since the aftermath of the Great Depression.
At the heart of the political check was America's Glass-Steagall Act of 1933.
The banks that sold subprime mortgages and ALT-A loans with as many options to make loan payments as they could muster along with financial firms, shopped for a president to deregulate the Glass-Steagall Act, which was also known as the Banking Act of 1933.
The Federal Reserve System, created in 1913, and the Federal Deposit Insurance Corporation, established by the Glass-Steagall Act of 1933, contributed to stability, but left intact the fundamental structural weakness inherent in an underregulated, fragmented banking system.