Glass Steagal Act Law and Legal Definition
The Glass-Steagal Act was introduced to make banking reforms, some of which were designed to control speculation. The Act was named after Carter Glass and Henry B. Steagall. The first Glass-Steagall Act of 1932 was enacted in an effort to stop deflation, and expanded the scope to offer rediscounts on more types of assets, such as government bonds as well as commercial paper. The second Glass–Steagall Act (the Banking Act of 1933) was formed after the collapse of a large portion of the American commercial banking system in early 1933. It introduced the separation of bank types according to their business.
The banking industry had been seeking the repeal of Glass–Steagall since at least the 1980s. In 2010, the Glass-Steagall Act was reenacted to re-impose the separation of commercial and investment banking that had been in effect from the original Act in 1933.