Sep 152011
 

The repeal of provisions of the Glass–Seagall Act of 1933 by the Gramm–Leach–Bliley Act effectively removed the separation that previously existed between investment banking which issued securities and commercial banks which accepted deposits. The deregulation also removed conflict of interest prohibitions between investment bankers serving as officers of commercial banks. Most economists believe this repeal directly contributed to the severity of the Financial crisis of 2007–2011 by allowing Wall Street investment banking firms to gamble with their depositors’ money that was held in commercial banks owned or created by the investment firms.

via Glass–Steagall Act – Wikipedia, the free encyclopedia.

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