The law that stopped banks gambling with your savings

A closer look

Imagine walking into a casino, and the guy rolling the craps dice is using your grandmother’s pension fund. That was the American banking system before 1933. After Wall Street’s reckless speculation triggered the Great Depression, the government passed the Glass-Steagall Act to build an impenetrable firewall between boring commercial banks (where you keep your savings) and sexy investment banks (where sociopaths gamble on derivatives). For 60 years, the US enjoyed a boring, crisis-free financial sector. Then, in 1999, lobbyists convinced Congress to tear down the firewall because "markets regulate themselves." Spoiler alert: less than a decade later, the entire global economy imploded.