The Glass-Steagall Act 1933 is also known as the Banking Act. This law was passed in during the Depression era. The act prohibited the investments and the commercials banking activities. The act was later repealed in 1999 with the Gramm-Leach-Bliley Act.
The Glass-Steagall Act was originally part of President Franklin D. Roosevelt’s New Deal. During the pre-Depression era, the Commercial Banks were being too risky because not only were they investing their assets, they were also buying new issues and reselling it to the public. The banks became greedy and taking big risks hoping for more. The policy was made to create a wall between investment banking and the commercial banking. The Glass-Steagall Act made the public comfortable about banking again during the Great Depression.…show more content… Henry Steagall was a member of the House of Representatives and chairman of the House Banking and Currency Committee. Henry Steagall agreed to support the Act with Carter Glass after an amendment was added, allowing bank deposit insurance. The Glass-Steagall Act put a barrier between the investment and commercial bank activities; this curbed and controlled the activities.
Many financial legislator and bank reformers felt that the act was not necessary, or it was outdated therefore it should be repealed. Congress responded to the criticism and passed the Gramm-Leach-Bliley Act, this act made significant changes towards the Glass-Steagall Act. The act repealed the Glass-Steagall Act’s restrictions on bank and security-firm relationships. The Gramm-Leach-Bliley Act also reform the Bank Holding Company Act to allow relationships with financial services companies, along with banks, security firms and insurance companies. The new law removed the walls and became more