Glass-Steagall Act
The
Glass-Steagall Act of
1933 was passed in the aftermath of the
crash of
1929. The following provisions were enacted:
- Separated the activities of banks and securities firms (prohibited commercial banks from owning brokerages)
- Introduced FDIC insurance
- Regulation Q which placed a cap on interest paid on savings accounts
On November 12, 1999,
President Clinton signed into law the
Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act. One impact of this repeal is that certain advisory activities of the banks are now regulated by the
Investment Advisor Act of 1940.
See also: Financial supervision, Financial institutions, Disintermediation, Eurodollars