What was established by the Banking Act of 1933?

The Banking Act of 1933, also known as the Glass-Steagall Act, is primarily known for establishing the Federal Deposit Insurance Corporation (FDIC). The FDIC was created in response to the bank failures that contributed to the Great Depression, with the primary objective of restoring public confidence in the banking system. By providing insurance for bank deposits up to a certain limit, the FDIC ensured that depositors would not lose their savings if a bank failed. This mechanism aimed to stabilize the financial system and promote greater financial security for individuals and businesses.

While the act also implemented other important regulations, such as separating commercial and investment banking, the establishment of the FDIC is the most significant and recognized feature resulting from the Banking Act of 1933. This agency continues to play a critical role in insuring deposits and regulating banks, contributing to a safer banking environment.