Glass Steagall Act

Passed in 1933, the Glass Steagall Act prohibits commercial banks from collaborating with brokerage firms. Under this act, banks are not also allowed to participate in investment banking activities. This act was enacted during the great depression as a way to enhance the security if the depositors. The act was abolished in 1999 after which commercial banks and brokerage firms have been closely collaborating to cope with competition from other financial institutions.

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