Banking Act of 1933

(noun)

The major New Deal legislation regulating the U.S. banking system. 

Related Terms

Examples of Banking Act of 1933 in the following topics:

  • Strengthening the Monetary System

    • In June of the same year, more long-term solutions were presented in the Banking Act of 1933 (also known as the Glass-Steagall Act although this term is not precise and usually refers to the provisions of the Banking Act of 1933 that dealt with commercial bank).
    • The most important provisions introduced by the 1933 Banking Act were:
    • Some of the provisions of the 1933 Banking Act are still in effect.
    • Senator Carter Glass of Virginia and Representative Henry Steagall of Alabama, the main force behind the 1933 Banking Act.
    • This picture shows the two congressional sponsors of the 1933 Banking Act, which introduced unprecedented reforms to the banking sector.

  • The Glass Steagall Banking Act

    • Thus, the United States government passed the Glass-Steagall Banking Act in 1933.
    • This law divided the functions of investment banking and commercial banking.
    • In practice, the Glass-Steagall Banking Act insulated investment banking from the competition.
    • The United States government repealed pieces of the Glass-Steagall Act in 1999 to allow U.S. investment banks to compete internationally as they moved into commercial banking and insurance.
    • Many people cannot gauge the financial health of banks.

  • Banking and Finance Reform

    • Between 1929 and 1933, 40 percent of all banks went bankrupt.
    • By the end of 1933, 4,004 small local banks were permanently closed and merged into larger banks.
    • The Emergency Banking Act, also known as the Glass–Steagall Act, also limited commercial bank securities activities and affiliations between commercial banks and securities firms to regulate speculations.
    • Several provisions of the act sought to restrict "speculative" uses of bank credit.
    • The act also established the Federal Deposit Insurance Corporation (FDIC), which insured deposits for up to $2,500, ending the risk of runs on banks.

  • Launching the New Deal

    • Only 36 hours after taking the presidential oath, Roosevelt closed all the banks (the so-called Bank Holiday).
    • The Emergency Banking Act followed the Proclamation and enabled the government to close weak banks and reopen more stable banks.
    • The creation of the Agricultural Adjustment Administration (1933).
    • The Civilian Conservation Corps (1933) put large numbers of men at work in natural resources projects (e.g., in national forests).
    • The National Labor Relations Act (1933; known also as the Wagner Act), which established the National Labor Relations Board (1935).

  • Securities Act of 1933

    • The Securities Act of 1933 ensures investors receive complete and accurate information before they invest.
    • The Securities Act of 1933 (also known as the '33 Act) is essentially a consumer protection law for "retail" investors (i.e. not money managers, foundations, pensions, etc.)
    • Section 4 of the Act limits its application to public offerings (according to SEC guidelines, more than 25 offerees) by issuers and their underwriters (i.e. investment banks).
    • Rule 144, promulgated by the SEC under the 1933 Act, permits, under limited circumstances, the sale of restricted and controlled securities without registration.
    • Regulation S is a "safe harbor" that defines when an offering of securities is deemed to be executed in another country and therefore not be subject to the registration requirement under section 5 of the 1933 Act.

  • Competing Solutions

    • With unemployment skyrocketing and banks on the verge of collapse, Hoover proposed a new plan.
    • The legislation that followed this Proclamation was the Emergency Banking Act, which enabled the government to close weak banks and reopen more stable banks.
    • The creation of the Agricultural Adjustment Administration (1933).
    • The National Labor Relations Act (1933), which established the National Labor Relations Board (1935).
    • Civil Works Administration (1933/34) provided temporary jobs to millions of unemployed.

  • The Great Depression and the New Deal

    • The New Deal was a series of economic programs enacted in the United States between 1933 and 1936 in response to the Great Depression.
    • The New Deal was a series of economic programs enacted in the United States between 1933 and 1936.
    • The "First New Deal" (1933–34) dealt with diverse groups, from banking and railroads to industry and farming, all of which demanded help for economic survival.
    • The final major items of New Deal legislation were the creation of the United States Housing Authority and Farm Security Administration, both in 1937, and the Fair Labor Standards Act of 1938, which set maximum hours and minimum wages for most categories of workers.
    • The New Deal regulation of banking (Glass–Steagall Act) was suspended in the 1990s.

  • The New Deal

    • The New Deal was a series of economic programs enacted between 1933-1936 in response to the Great Depression.
    • The New Deal was a series of economic programs enacted in the U.S. between 1933 and 1936 that involved presidential executive orders passed by Congress during the first term of President Franklin D.
    • Before the New Deal, deposits at banks were not insured against loss.
    • When thousands of banks faced bankruptcy, many people lost all their savings.
    • Housing Authority and Farm Security Administration, both begun in 1937, and the Fair Labor Standards Act of 1938, which set maximum hours and minimum wages for most categories of workers.

  • The Federal Deposit Insurance Corporation (FDIC)

    • As of April 16, 2012, the members of the Board of Directors of the FDIC are Martin J.
    • An independent agency of the federal government, the FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s.
    • The FDIC insures more than $7 trillion of deposits in U.S. banks and thrifts—deposits in virtually every bank and thrift in the country .
    • The FDIC Improvement Act of 1991 limits regulators' discretion as to when to close troubled financial institutions (FIs).
    • A good example is the prohibition against lending more than 10% of a bank's capital to any one borrower.

  • Wilsonian Progressivism

    • Leading the Congress, now in Democratic hands, he oversaw the passage of progressive legislative policies unparalleled until the New Deal in 1933.
    • Wilson's tariff reform was largely achieved through the passage of the Underwood Tariff Act of 1913.
    • The 1913 Act established the lowest rates since the Walker Tariff of 1857.
    • It was also aided through the passage of the Federal Farm Loan Act, (1916), which set up Farm Loan Banks to support farmers.
    • The decision to create twelve regional banks was meant to weaken the influence of the powerful New York banks, a key demand of Bryan's allies in the South and West.