Which act separated commercial banking from investment banking to protect assets?

The Glass-Steagall Act of 1933 is the legislation that effectively separated commercial banking from investment banking. This separation was implemented to protect consumer deposits and reduce the risk of financial speculation that could endanger the banking system and the economy as a whole. The rationale behind this act was to ensure that banks focusing on retail banking services, such as accepting deposits and making loans, could not engage in investment activities that were riskier and could potentially jeopardize the safety of customer deposits.

The Glass-Steagall Act introduced provisions that prohibited commercial banks from underwriting or dealing in securities, thus creating a clear boundary between the two types of banking activities. This distinction was intended to protect consumers by ensuring that their deposits were not used for speculative investments, thereby bolstering public confidence in the banking system during a time of economic uncertainty.

Other legislative acts mentioned have different purposes and scopes. The Emergency Banking Act of 1933 was focused on stabilizing the banking system during the Great Depression, while the Securities Exchange Act of 1934 primarily addressed the regulation of securities markets. The Dodd-Frank Act of 2010 aimed to reform the financial system broadly in response to the 2008 financial crisis but did not reinstate the strict separation of banking types originally