The Glass-Steagall Act was the 1933 U.S. banking law associated with separating commercial and investment banking.
More precisely, Glass-Steagall refers to four provisions of the Banking Act of 1933. They restricted commercial banks from underwriting or dealing in many non-government securities and limited affiliations between commercial banks and securities firms. Investment banks and securities companies were also prevented from taking ordinary deposits like commercial banks.
The legislation emerged during the banking crisis of the Great Depression. Its congressional sponsors were Senator Carter Glass of Virginia and Representative Henry B. Steagall of Alabama. The wider Banking Act of 1933 also created the Federal Deposit Insurance Corporation, although the deposit-insurance provisions and the Glass-Steagall separation provisions are not identical.
The restrictions were gradually weakened through regulatory interpretations before the Gramm-Leach-Bliley Act of 1999 repealed key affiliation barriers. The law is often confused with Dodd-Frank, which followed the 2008 financial crisis and addressed different problems. The McFadden Act concerned branch banking and is unrelated to this separation.