The Glass-Steagall Act of 1933:

Question

Quizplus · Accepted Answer

The Glass-Steagall Act of 1933 separated high-risk and low-risk financial activities across different firms, meaning that banks were limited in the types of investments they could make and which types of services they could offer. It was intended to reduce the risk of another financial crisis by separating commercial banking from investment banking activities. However, the Act was repealed in 1999, and many argue that this contributed to the 2007-2008 financial crisis as banks began to engage in riskier activities. Nonetheless, the act did not create "too big to fail" banks or encourage the creation of large,interconnected financial services firms as suggested in options A and C.