Order Code 1887061 - Digital Library.pdfVIP

Order Code 1887061 GLASS-STEAGALL ACT: COMMERCIAL VS. INVESTMENT BANKING Updated June 29, 1987 GQYERNMENT D O C U M E ~ CBUECTION by William D. Jackson Economics Division Congressional Research Service CONTENTS SUMMARY I S S U E D E F I N I T I O N BACKGROUND AND A N A L Y S I S C O N G R E S S I O N A L H E A R I N G S , R E P O R T S , AND DOCUMENTS FOR A D D I T I O N A L READING GLASS-STEAGALL ACT: COMMERCIAL VS. INVESTMENT BANKING Debate o v e r reform of t h e N a t i o n s f i n a n c i a l s t r u c t u r e i n t h e 1 0 0 t h Congress i n c l u d e s re-examination of t h e s e p a r a t i o n of banking and cormerce . T h i s s e p a r a t i o n was mandated by t h e G l a s s - S t e a g a l l Act ( p a r t of t h e Banking Act of 1933); and was c a r r i e d forward i n t o t h e Bank Holding Company Act of 1956, a s amended i n 1970 and t h e r e a f t e r . The r e s u l t i n g i s o l a t i o n of banking from s e c u r i t i e s was d e s i g n e d t o ( 1 ) m a i n t a i n t h e i n t e g r i t y of t h e banking system; ( 2 ) p r e v e n t s e l f - d e a l i n g and o t h e r f i n a n c i a l a b u s e s ; and ( 3 ) l i m i t s t o c k market s p e c u l a t i o n . By h a l f a c e n t u r y l a t e r , t h e wall i t c r e a t e d seemed t o be crumbling, a s b a n k e r s c r e a t e d ne