The first "Glass—Steagall Act" was a law passed by the United States Congress on February 27, , prior to the inclusion of more comprehensive measures in the Banking Act of , which is now more commonly known as the Glass-Steagall Act.
It was the first time that currency non-specie, paper currency etc. It was passed in an effort to stop deflation and expanded the Federal Reserve 's ability to offer loans to member banks rediscounts on more types of assets such as government bonds as well as commercial paper.
Steagall , the Congressman from Alabama's 3rd congressional district.
The crash of evolved in a panic situation due to people losing their savings. Therefore, a massive withdrawal of deposits of the banks took place leading to the bankruptcy of many entities.
In , a young prosecutor named Ferdinand Pecora , who was a member of the US Senate's Monetary and Financial Affairs Commission, interrogated several bank managers about their detestable role in the crisis.
Yaron Answers: Glass-Steagall And The Financial Crisis
These hearings and the coming to power of Franklin D. Roosevelt and his New Deal policy gave rise to the law.
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Patrick , pp. Each form of special lending to Federal Reserve member banks required approval from at least five members of the Federal Reserve Board.
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