The Banking Act of 1933, commonly referred to as the Glass-Steagall Act, was a landmark piece of legislation in the United States that introduced significant reforms to the banking industry. It was enacted in response to the financial crises and bank failures during the Great Depression. The Glass-Steagall Act effectively separated commercial banking from investment banking and created the Federal Deposit Insurance Corporation (FDIC).
The Glass-Steagall Act remained largely intact until the 1980s and 1990s, when various provisions were gradually eroded. The most significant repeal came with the Gramm-Leach-Bliley Act of 1999, which allowed commercial banks, investment banks, securities firms, and insurance companies to consolidate.
[Last updated in July of 2024 by the Wex Definitions Team]