The Glass–Steagall Act created the Federal Deposit Insurance Corporation after the banking crisis of the early 1930s.
The Banking Act of 1933, commonly called the Glass–Steagall Act, established federal deposit insurance through the FDIC. It also separated commercial banking from investment banking and introduced other banking reforms intended to restore public confidence.
The reforms followed thousands of U.S. bank failures during the Great Depression. Deposit insurance was designed to reduce the incentive for depositors to rush to withdraw their money when they feared a bank might fail.
A common mix-up is treating the act as the same thing as the 1933 Securities Act. The Securities Act regulated new securities offerings, while Glass–Steagall focused on banking structure and deposit protection. Congress repealed the commercial-investment banking separation in 1999, although parts of the original legislation had already been modified.