The Banking Act of 1933, commonly known as the Glass-Steagall Act after its sponsors, Senator Carter Glass and Representative Henry Steagall, is a United States federal law enacted in response to the wave of bank failures that followed the 1929 stock market crash. It separated commercial banking from investment banking, barring firms that took deposits from also underwriting or dealing in securities, in order to prevent the kind of speculative risk-taking blamed for the crisis. The act also established the Federal Deposit Insurance Corporation to insure bank deposits and restore public confidence in the banking system. Its core provisions separating commercial and investment banking were gradually eroded through the late twentieth century and were formally repealed by the Gramm-Leach-Bliley Act of 1999, though the FDIC deposit insurance it created remains in force.
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