jun 16, 1933 - Glass-Steagall Banking Act

Description:

The main purpose of the Glass-Steagall was to force the banks to decide whether they would be commercial or investment banks in order to ensure that the one system of banks would not be putting too much risk of attempting to gain a profit with the potential cost of becoming bankrupt. At the time the separation of the banks was not controversial with many believing it would benefit the economy. This would be later be mostly repealed by the Gramm-Leach-Billey Act. The Glass-Steagall Banking Act also establish the Federal Deposit Insurance Corporation (FDIC) which help customers to be insured to a certain degree that they would get something back from their deposit should the bank fail. This gathered much support from the smaller banks and people for the reasons that many blame big banks for the cause of the market collapse and the hopes that they may be able to get something from their loss. While bigger banks opposed the FDIC because they believed that they would have to subsidize for the smaller banks.