The Glass-Steagall Act of 1933 created the Federal Deposit Insurance Corporation and instituted several economic reforms in the wake of the 1929 stock market crash and during the Great Depression. It was introduced by two members of Congress, Senator Carter Glass, a former Treasury secretary and the founder of the U.S. Federal Reserve System, and Henry Bascom Steagall, a House of Representatives member and chairman of the House Banking and Currency Committee.
The Act separated investment and commercial banking activities. At the time, improper or overzealous commercial bank involvement in stock market investment was thought to be the main cause of the financial crash.
Enactment of the Gramm-Leach-Bliley Act (GLBA) in November 1999 effectively repealed the Act's prohibitions on mixing banking with securities or insurance businesses and thus permits “broad banking.”