what was the glass steagall act 
spurred by the failure of almost 5 000 banks during the great depression the glass steagall act was passed by the u s congress as part of the banking act of 1933 sponsored by sen carter glass a former treasury secretary and rep henry steagall chair of the house banking and currency committee it prohibited commercial banks from participating in the investment banking business and vice versa 20the rationale was the conflict of interest that arose when banks invested in securities with their own assets which of course were actually their account holders assets simply put the bill s proponents argued that banks had a fiduciary duty to protect these assets and not to engage in excessively speculative activity the bottom linethe volcker rule is intended to restrict high risk speculative trading activity by banks such as proprietary trading or investing in or sponsoring hedge funds or private equity funds it maintains banks abilities to offer important customer oriented financial services such as underwriting market making and asset management services the regulations have been developed by five federal financial regulatory agencies all described above the federal reserve board the cftc the fdic the occ and the sec 