In 1933, the US economy had declined to .
(approved June 16, 1933) extended federal .
reserve open market activities; created the .
Federal Deposit Insurance Corporation to insure .
deposits; and regulated the operations of member .
banks and seperated security groups.
The Banking Act of 1933 is also known as .
the Glass-Steagall Act of 1933 because it was .
authored by Senators Carter Glass and Henry .
Steagall. This act made sure that banks did .
not get mixed up with Wall Street. Spurred by .
the 1929 market crash, known better as either .
the Great Depression or Black Tuesday, and the .
bank failures that followed, the act was aimed .
at restoring confidence in the banking system.
(Henriques) .
This Banking Act of 1933 also helped .
establish the Federal Deposit Insurance .
Corporation,FDIC. The FDIC insured customer .
accounts, and it also stopped banks from being .
able to accept deposits and underwriting .
securities at the same time. Banking .
institutions were given a year to decide whether .
to become commercial banks, which could accept .
customer deposits in checking and savings .
accounts, or investment banks, which could .
engage in the riskier business of corporate .
underwriting, involving the purchase of new .
securities from the corporate issuers and their .
resale to the public.(Henriques).
The Banking Act of 1933 was probably the .
newly-elected Roosevelt administration's most .
important response to the perceived shambles of .
the nation's financial and economic system.
(Benston).
The FDIC helped people gain courage in the .
banks again. The initial coverage was only .
$2,500 per account, but it has since been .
increased to a maximum of $100,000 for one .
person at one bank.(Clayton) Although the .
insurance helped many people out since it was .
started, it did not help out anyone that lost .
anything before 1934.
The FDIC created less and less worries for .
people as it grew. Thanks to the FDIC banks .
slowly started to rise again since the fall.
