1933 Banking Act

The 1933 Banking Act, also known as the Glass-Steagall Act, was enacted to restore trust in the banking system after the Great Depression. It separated commercial banks (which handle everyday banking) from investment banks (which deal with securities and stock trading). This was meant to reduce risky practices that could lead to bank failures. The Act also established the Federal Deposit Insurance Corporation (FDIC) to protect depositors’ money. Overall, it aimed to promote financial stability, prevent bank collapses, and reassure the public that their savings were secure.