TL;DR - The Gramm-Leach-Bliley Act repealed the Glass-Steagall Act that prohibited commercial banks from providing other financial service offerings.
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Tags - Gramm-Leach-Bliley Ac, Glass-Steagall Act, commercial bank, investment, insurance
- What is the Gramm-Leach-Bliley Act?
- The GLBA is most famously known as the repeal of the Glass-Steagall Act (1933).
- Glass-Steagall disallowed commercial banks from offering other financial services (ie. investment and insurance services) as part of their normal operations.
- Since many regulations have been instituted since the 1930s to protect bank depositors from exposure to risk (reason for Glass-Steagall), GLBA was created to allow these financial industry participants to offer more services.
- Citicorp’s (commercial bank) merger with insurance firm Travelers Group set the stage for GLBA.
Follow up links:
- Glass-Steagall Act, https://www.investopedia.com/terms/g/glass_steagall_act.asp