The Past Speaks

Glass Steagall law kept commercial or depository banks in the United States separate from their more speculative Wall Street investment banks. It was passed in the aftermath of the wave of bank failures in the early 1930s. It promoted financial stability and worked well until it was repealed. The repeal of Glass-Steagall is commonly associated with a law passed by Congress in 1999. As Barry Ritholtz shows in a recent blog post, the 1999 Gramm-Leach-Bliley Act was really the culmination of a series of changes aimed at watering down the principle that investment and commercial banking should be kept separate.