Glass-Steagal Act

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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 Most of the Glass-Steagal Act was repealed by the Gramm-Leach-Bliley Act in 1999.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.
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References in periodicals archive ?
Rather than another bureaucracy, we should return to the days of the Glass Steagall Act, which banned commercial banks from joining forces with insurance companies or brokerage firms or from acting as investment banks.
Both bills would repeal the Glass Steagall Act breaking down the Depression-era barriers set up to separate the banking, insurance and securities industries which could result in lower rates for municipal bonds.
* Glass Steagall Act: Federal law prohibits bank subsidiaries of a foreign controlled bank incorporated in the United States from owning a securities firm.