What major act reformed the banking industry during the Great Depression?

The Glass-Steagall Act is recognized as a pivotal piece of legislation that reformed the banking industry during the Great Depression. Enacted in 1933, this act implemented significant changes aimed at restoring public confidence in the banking system, which had been severely undermined by the financial turmoil of the Great Depression.

One of the most notable features of the Glass-Steagall Act was the separation of commercial banking from investment banking. This division was intended to prevent banks from engaging in high-risk investment activities that could jeopardize depositor funds. By legally delineating these two types of banking activities, the act aimed to reduce the risk of bank failures and protect consumers' savings.

Additionally, the Glass-Steagall Act established the Federal Deposit Insurance Corporation (FDIC), which provided federal insurance for bank deposits, further contributing to the stabilization of the banking system. This insurance helped reassure the public that their deposits were safe, which was crucial for restoring trust in the financial system during a period of widespread economic uncertainty.

Overall, the Glass-Steagall Act addressed critical vulnerabilities in the banking sector, making it a cornerstone of the financial reforms implemented in response to the Great Depression.