GLASS-STEAGALL ACT:COMMERCIAL VS. INVESTMENT
Debate over reform of the Nation's financial structure in the 100thCongress includes re-examination of "the separation of banking andcormerce
This separation was mandated by the Glass-Steagall Act (partof the Banking Act of 1933); and was carried forward into the Bank HoldingCompany Act of 1956, as amended in 1970 and thereafter. The resultingisolation of banking from securities was designed to (1) maintain theintegrity of the banking system;
prevent self-dealing and otherfinancial abuses; and (3)
stock market speculation. By half acentury later, the "wall"
created seemed to be crumbling, as bankerscreated new financial products resembling securities, and securities firmsinnovated new financial products resembling loans and deposits. Theongoing process of "financial deregulationw has evoked calls for Congressto give depository institutions new powers, especially in the securitiesfield. Financial deregulation in the United Kingdom, Canada, and Japanhas put additional pressure on Congress to re-examine this Act. Concernsover a seemingly fragile system of depositary institutions persist,however, tending to place counter-pressure on Congress