The Glass-Steagall Act Analysis

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An emergency legislative action that was taken to offset some of the detrimental economic factors during the Great Depression in 1933 as a result of the failure of around five thousand banks. The act was signed into law on June 16, 1933 by President Roosevelt. The two main purposes behind the legislation were to first, stop the run on banks and re-build confidence in people about the banking system again; and two, to demolish the link between investment and commercial banking, a factor that was largely thought to have contributed to the 1929 market crash. Therefore, the Glass-Steagall Act separated the two, commercial and investment banking and also prohibited these commercial banks from participating in any sort of investment business activities as well as stiffened the regulations on national banks overall. The legislation was developed by Senator Glass, former Treasury Secretary and Representative Steagall, chairman of the House Banking and Currency Committee. In addition to the previously mentioned purposed of this legislation, the two men also developed the creation of the Federal Deposit…show more content…
Therefore, interest in this remains strong in both party’s political agendas. Overall, Glass-Steagall as a whole once provided a large feeling of security for Americans in times of financial crisis and leveled some playing grounds, so to speak, which is understandable for its popularity gain in years since the 2008 economic crisis. Some argue a reinstatement of the Glass-Steagall could be detrimental to current economic growth and others feel it is necessary and will not be a hindrance, but rather a benefit to the American people and economy. The act has a strong history rooted in the benefit and protection of the people, so only time will tell what ground the idea gains from here on
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