Banking Act of 1933

Major banking reform legislation enacted by Congress as a remedy to the financial instability in the banking system during the Great Depression, creating the Federal Open Market Committee and the Federal Deposit Insurance Corporation. The act gave effective control of Monetary Policy to the Federal Reserve Board of Governors. Sections 16, 20, 21, and 32 of the act, separating commercial banking from investment banking, are more commonly known as the Glass-Steagall Act. The Glass-Steagall Act enforced a legal separation of commercial and investment banking activities until these restrictions were removed by the Gramm-Leach-Bliley Act of 1999.