First, in the runner moneymaking(prenominal) cusss were accused of being hypothetical in the pre-depression era, although not only because they were investing their resources but also because they were buying unsanded issues but for resale to the public. Therefore, banks became greedy and took on huge risks to get more money. The banks became un-organized and their goals were not certain of. Loans were given out to companies to which banks had invested and customer or donjoners were encouraged to invest in the same loans. Nevertheless, Steagall agreed to support the Glass process after an amendment was added allowing bank deposit insurance.
Secondly, at such a predicament time the Glass Steagall Act set up a monitoring firewall between commercialised and investment bank activities.
As a collective reception to one of the worst financial crises at the time, the GSA set up a regulatory firewall between commercial and investment bank activities, both of which were curbed and controlled. Banks were given a year to decide on whether they would specialize in commercial or in investment banking. Only about ten percent of all commercial banks could stern from securities, although there was an exception to commercial banks which allowed them to underwrite government- issued bonds. By creating the wall, Glass Steagall Act was targeting to prevent banks from the use of deposits in cause of a failed underwriting job.
To Conclude, The Glass Steagall Act was used to limit commercial bank securities and affiliations between commercial banks and...If you want to get a full essay, order it on our website: Orderessay
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