Glass–Steagall Act

The Glass–Steagall Act was a 1933 United States law that separated commercial banking from securities activities and established federal deposit insurance.

Banking Act of 1933: A United States statute that restructured banking after the Great Depression and included the provisions known as Glass–Steagall. Its Title I established the separation of commercial and investment banking.
Great Depression: A global economic crisis beginning in 1929, marked by severe declines in output, employment, and trade. Banking collapse during the Depression drove demands for federal reform.
Glass–Steagall legislation: The provisions of the Banking Act of 1933 that separated commercial banking from securities underwriting and dealing. These specific provisions supplied the Act’s enduring structural restrictions.
National Bank Act: A series of United States laws that established a system of nationally chartered banks and a national currency during the Civil War. It created a federal banking framework without the Act’s commercial-securities separation.
Federal Deposit Insurance Corporation: A United States government corporation that insures deposits at participating banks. The Act created this agency to insure bank deposits.
Pecora Commission: A United States Senate investigation into Wall Street practices that preceded the 1933 banking legislation. Its findings fueled public support for stricter financial regulation.
Bank Holding Company Act: A United States law regulating companies that own or control banks. Later amendments strengthened limits on affiliations between banks and securities firms.
Federal Reserve Act: A 1913 United States law that created the Federal Reserve System. It addressed financial instability through a central bank rather than activity separation.
Commercial bank: A financial institution that accepts deposits and makes loans to households and businesses. The Act restricted commercial banks’ securities activities.
Banking panics in the United States: Episodes in which fears about banks prompted depositors to withdraw funds and threatened widespread failures. Repeated panics exposed the dangers of unstable deposit-taking banks.

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