Glass-Steagall Act investment & finance definition

A law passed in 1933 in response to the banking collapse that occurred in the wake of the Great Depression. The law created deposit insurance, prohibited commercial banks from owning insurance companies or brokerage firms, and prevented banks from conducting underwriting activities such as raising debt and equity for companies. The terms of the Glass-Steagall Act that prevented banks from owning insurance companies and brokerage firms and underwriting activities were repealed in 1999 by the Financial Modernization Act.