In 1933, in the wake of 1929 great depression and during nationwide commercial bank failures, the United States’ congress introduced a new act, known as the Glass-Steagal Act (GSA) of 1933, which separates investment and commercial bank activities. At that time, the involvement of commercial banks in excessive stock market activity was thought to be the culprit behind the Great Depression. The main reasoning behind the act was that commercial banks took on too much of risky activities with depositors’ money. However, in 1999, the US Congress passed a bill known as Gramm-Leach-Bliely Act, also known as the Financial Services Modernization Act of 1999, after which the Glass-Steagal Act was repealed.
During the campaign, President Donald Trump said that he would bring back the act again and while speaking to the reporters, White House Spokesperson Sean Spicer said that the President remains committed to his promise on the Glass-Steagall Act. In the aftermath of the 2008/09 Great Recession US legislators had tried to bring back the GSA as part of the Dodd-Frank legislations, however, the attempt failed.
Even if the Glass-Stegall Act returns, it may not be in its old form. Donald Trump’s treasury secretary Steven Munchin said that he doesn’t support bringing back that act as is and talked to the President on a new 21st century Glass-Steagall.