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On November 12, 1999, President Clinton signed into law the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act.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