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What is the Glass-Steagall Act of 1932? What is the Gramm-Leach-Bliely Act of 1999? Discuss the...

What is the Glass-Steagall Act of 1932? What is the Gramm-Leach-Bliely Act of 1999? Discuss the aim and purpose of each.

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The Glass-Steagall Act of 1932 is a law that main purpose is to prohibts banks from using depositors' funds for risky business investments, such as the stock market. Glass-Steagall was an emergency response to the failure of approximately 5,000 banks during the Great Depression.

On November 12, 1999, President Clinton signed the Financial Service Modernisation Act that repealed Glass-Steagall. Congress passed Gramm-Leach-Bliley Act along party lines that were led in the Senate by a Republican vote. The main purpose was to "modernize" financial services; and to fulfil it the act removed the barriers in the market among securities companies, banking companies and insurance companies that earlier prohibited from acting as any combination of securities, banking and insurance.

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