What was the Glass-Steagall Act designed to do?
A. Promote free trade between countries
B. Allow investment banks to use public deposits
C. Separate commercial and investment banking
D. Raise taxes on the wealthy
Answer (2)
The correct answer is letter C. Separate commercial and investment bankingThe Glass-Steagall Act was passed in the United States in 1933 to prevent banks from using customer savings for risky investments. It created a wall between regular banks (that hold deposits) and investment banks (that sell stocks or bonds). The idea was to protect people’s money and stop another Great Depression. When this act was repealed in the 1990s, many believe it opened the door to the 2008 financial crisis. It's a reminder of why clear rules in finance are important to avoid putting people's money at risk.
Answer:C. Separate commercial and investment banking.
