The Glass-Steagall Act was imposed to allow commercial and investment banks to combine and work together.

Question

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The Glass-Steagall Act, also known as the Banking Act of 1933, was actually imposed to separate commercial banking activities, such as taking deposits and making loans, from investment banking activities, such as underwriting securities and engaging in speculative trading. It was meant to prevent conflicts of interest and limit the risk exposure of banks, ultimately protecting consumers and the overall financial system. The act was repealed in 1999 with the passing of the Gramm-Leach-Bliley Act, which allowed for the merger of commercial and investment banks.

The Glass-Steagall Act Was Imposed to Allow Commercial and Investment