Glass-Steagall Act

(noun)

The Banking Act of 1933 was a law that established the Federal Deposit Insurance Corporation (FDIC) in the United States and imposed banking reforms, several of which were intended to control speculation. It is often referred to as the Glass–Steagall Act, after its Congressional sponsors, Senator Carter Glass (D) of Virginia, and Representative Henry B. Steagall (D) of Alabama.

Related Terms

Examples of Glass-Steagall Act in the following topics:

  • Clintonomics

    • The only laws of the Clinton administration that could be considered deregulatory were the Telecom Reform Act of February 8, 1996, which eliminated ownership restrictions on radio and television; the pesticides legislation of 1996; and the Food and Drug Administration overhaul of 1997.
    • All were signed into law by Clinton, along with the Financial Services Modernization Act of 1999, which allowed banks, insurance companies and investment houses to merge, thus repealing the Glass-Steagall Act, which had been in place since 1932.
    • Clinton signed the Omnibus Budget Reconciliation Act of 1993 into law.
    • This Act cut taxes for 15 million low-income families, made tax cuts available to 90% of small businesses, and raised taxes on the wealthiest 1.2% of taxpayers.
    • The Personal Responsibility and Work Opportunity Act of 1996 represented a fundamental shift in both methods and goal of the federal cash assistance to the poor; the law fulfilled Clinton's 1992 campaign promise to "end welfare as we have come to know it."

  • Banking and Finance Reform

    • On March 9, Roosevelt sent to Congress the Emergency Banking Act, drafted in large part by Hoover's top advisors.
    • The act was passed and signed into law the same day.
    • The Emergency Banking Act, also known as the Glass–Steagall Act, also limited commercial bank securities activities and affiliations between commercial banks and securities firms to regulate speculations.
    • Several provisions of the act sought to restrict "speculative" uses of bank credit.
    • With the passage of the Gold Reserve Act in 1934, the nominal price of gold was changed from $20.67 per troy ounce to $35.

  • The Clinton Administration

    • This act received support from both political parties.
    • He also signed the reversal of the Glass-Steagall Act, which was designed to prevent financial institutions from getting too big to fail.
    • In addition, he signed the Commodity Futures Modernization Act, which legalized over-the-counter derivatives.
    • However, Clinton signed the Defense of Marriage Act, considered by many to be a blow to the LGBT rights movement.
    • The Clinton presidency also saw the passage and signing of the Iraq Liberation Act of 1998, which was a bipartisan measure expressing support for regime change in Iraq.

  • Wall Street Crash of 1929

    • Congress passed the Glass–Steagall Act, mandating a separation between commercial banks, which take deposits and extend loans, and investment banks, which underwrite, issue, and distribute stocks, bonds, and other securities.

  • Strengthening the Monetary System

    • On March 9, 1933, the Emergency Banking Act was introduced to and passed by Congress.
    • In June of the same year, more long-term solutions were presented in the Banking Act of 1933 (also known as the Glass-Steagall Act although this term is not precise and usually refers to the provisions of the Banking Act of 1933 that dealt with commercial bank).
    • The most important provisions introduced by the 1933 Banking Act were:
    • Some of the provisions of the 1933 Banking Act are still in effect.
    • Senator Carter Glass of Virginia and Representative Henry Steagall of Alabama, the main force behind the 1933 Banking Act.

  • The Great Depression

    • Congress passed the Glass–Steagall Act, officially named the Banking Act of 1933, mandating a separation between commercial banks, which take deposits and extend loans, and investment banks, which underwrite, issue, and distribute stocks, bonds and other securities.

  • Reaction and Recession

    • In the fall of 1937, the Housing Act (known also as the Wagner-Steagall Act) introduced government subsidies for local public housing agencies to improve living conditions for low-income families.
    • In February 1938, Congress passed the second Agricultural Adjustment Act (AAA), which authorized crop loans, crop insurance against natural disasters, and large subsidies to farmers who cut back production.

  • The Last of the New Deal Reforms

    • The Third New Deal usually refers to the period around and following the Recession of 1937-38 with some pointing to the the 1939 Reorganization Act (which allowed the President to reorganize the executive branch) as the end of the final phase of the New Deal.  
    • In the fall of 1937, the Housing Act (known also as the Wagner-Steagall Act) introduced government subsidies for local public housing agencies to improve living conditions for low-income families.
    • In February 1938, Congress passed the second Agricultural Adjustment Act (AAA), which authorized crop loans, crop insurance against natural disasters, and large subsidies to farmers who cut back production.
    • One of the most influential pieces of legislation passed in the final stage of the New Deal was also the 1938 Fair Labor Standards Act (FLSA).
    • Historians estimate that the Act's provisions covered not more than 20% of labor force.

  • The Federal Reserve Act

    • President Wilson secured passage of the Federal Reserve Act in late 1913.
    • President Wilson secured passage of the Federal Reserve Act in late 1913, as an attempt to carve out a middle ground between conservative Republicans, led by Senator Nelson W.
    • The compromise, based on the Aldrich Plan but sponsored by Democratic congressmen Carter Glass and Robert Owen, allowed the private banks to control twelve regional Federal Reserve Banks and placed controlling interest in a central board to be appointed by the president with Senate approval.
    • The final Federal Reserve Act passed in December 1913, and most bankers criticized the plan for giving too much financial control to Washington, while liberal reformers claimed that it allowed bankers to maintain too much power.
    • Despite the fact that the Act intended to diminish the influence of the New York banks, the New York branch continued to dominate the Federal Reserve until the New Deal reorganized and strengthened the Federal Reserve in the 1930s.

  • Nonconsumption and the Daughters of Liberty

    • Two colonial movements, the Daughters of Liberty and the nonconsumption agreements, were created in response to British taxation such as the Stamp Act .
    • Proving their commitment to "the cause of liberty and industry" they openly opposed the Tea Act.
    • They helped end the Stamp Act in 1766.
    • These duties taxed items that were frequently imported to the colonies from Britain, including tea, paint, paper, and glass.
    • These import duties were birthed from the Intolerable Acts that Britain passed in the wake of the Boston Tea Party the previous year, which protested high taxes against tea and other products.