This act completely restructured America’s banking system by separating commercial and investment banks. This was crucial because at the time banks were using people’s money to invest in the stock market, and that is what caused over five thousand banks to fail during the Great Depression. The commercial banks were now for individual deposits and loans and investment banks were for sophisticated financial products for big U.S. corporations. One of the most important ideals that transpired from the Banking Act of 1933 was the idea of the Federal Deposit Insurance Cooperation
This act completely restructured America’s banking system by separating commercial and investment banks. This was crucial because at the time banks were using people’s money to invest in the stock market, and that is what caused over five thousand banks to fail during the Great Depression. The commercial banks were now for individual deposits and loans and investment banks were for sophisticated financial products for big U.S. corporations. One of the most important ideals that transpired from the Banking Act of 1933 was the idea of the Federal Deposit Insurance Cooperation