IESET.
Policies·us_glass_steagall_banking_act_1933

Glass Steagall Banking Act 1933

USA·1933 1999candidate
movesfinancial deregulationrule of lawtransfer expansionspending level

What the policy did

The Banking Act of 1933 (Pub. L. 73-66, "Glass-Steagall") legally separated commercial deposit-taking from investment banking by prohibiting Fed-member banks from affiliating with securities firms, established the FDIC for deposit insurance, expanded the Federal Reserve's authority over speculative bank lending, and imposed Regulation Q ceilings on deposit interest. The structural separation of commercial and investment banking remained the defining feature of U.S. financial architecture until partial repeal by the 1999 Gramm-Leach-Bliley Act.

Policy-content fingerprint — what this policy moved, on which axes

Per invariant 3, reforms are scored by what they did on each channel-separated axis, not by the party that enacted them. This fingerprint is how the policy-match engine finds historical analogues.

intended
financial deregulation
regulatory.financial_deregulation
Financial-sector regulation — banking separation, capital requirements, cross-border activity rules, derivatives oversight.
increased · weak
tighter financial regulation
Imposed structural separation of commercial and investment banking, sharply increasing regulation.
rule of law
institutional.rule_of_law
Rule of law as institutional substrate — contract enforcement, judicial independence, equal treatment before the law. Upstream of most other axes.
increased · weak
stronger rule of law
Codified statutory bank-holding-company rules and chartered FDIC enforcement authority.
transfer expansion
fiscal.transfer_expansion
Size of cash and near-cash transfer programmes (unemployment benefits, means-tested assistance, universal child benefits). Architecturally distinct from forced-saving schemes — see condition welfare_architecture.
increased · weak
larger transfer footprint
Deposit insurance functioned as implicit transfer to depositors via socialized bank-failure risk.
spending level
fiscal.spending_level
General government spending as share of GDP, excluding transfers already captured under fiscal.transfer_expansion to avoid double-counting.
increased · weak
higher spending share
Created FDIC and expanded Fed supervisory infrastructure, expanding federal financial outlays.

Enacted by

Empirical evidence — linked hypotheses

Explicit links are curated by the author. Inferred links are hypotheses in the library that test the same axes this policy moved — the framework's answer to "what does the data say about a policy like this?".

Large welfare states sustain long-run real GDP per capita growth when paired with market flexibility (low product- and labour-market barriers), trade openness, and fiscal discipline (debt-to-GDP below 90%), but not when paired with rigid product and labour markets, in an OECD and rich- country panel 1980-2020.
welfare_state_market_flexibility_complementinferred
viafiscal.spending_levelfiscal.transfer_expansion
PARTIAL — coef=+3.308e-18, p=0.653; effect magnitude effectively zero
partial
Large-scale universal or near-universal transfer programmes produce a three-order causal chain.
universal_transfer_programmes_labour_force_participation_declineinferred
viafiscal.transfer_expansionfiscal.spending_level
partial — Prime-age LFP fell by ≥1.0pp in 2/5 cases (threshold for SUPPORTED: ≥3). First-order improved in 3/4 cases. Mixed: consistent with the spec's design-d…
partial
The v1 decomposition (three channels: WGI gov effectiveness, WGI rule of law, IMF debt/GDP) left 98% of the Nordic-vs-Southern-Europe log GDP/capita gap unexplained.
nordic_outcome_persistence_decomposition_v2inferred
viainstitutional.rule_of_lawfiscal.spending_level
PARTIAL — coef=-0.1578, p=0.211 (above α=0.1); direction inconclusive
partial
From a comparable (arguably DPRK-favoured) 1953 armistice starting point — same ethnicity, language, pre-colonial institutional inheritance, and a Japanese colonial industrial capital stock disproportionately located in the North — the Republic of Korea's market economy with state-directed industrial policy and export discipline, versus the Democratic People's Republic of Korea's autarkic central planning under Juche, produced by 2023 a canonical divergence that pattern-matches >=7 of 10 pre-registered extreme-outcome metrics, each drawn from a different publisher or methodology family.
north_south_korea_development_divergence_1953_presentinferred
viafiscal.transfer_expansioninstitutional.rule_of_lawregulatory.financial_deregulation
INCONCLUSIVE_DATA_PENDING — no outcome variable loaded; missing: ['derived: count of canonical_metrics with threshold met']
run pending
Across countries 1996-2023, higher WGI Rule of Law (RL) scores predict higher subsequent real per-capita GDP growth, conditional on standard controls (initial income, investment share, trade openness, demographic composition).
rule_of_law_institutional_growthinferred
viainstitutional.rule_of_lawfiscal.transfer_expansion
PARTIAL — coef=+5.028e-17, p=0.0526; effect magnitude effectively zero
partial
The 2007-2009 global financial crisis originated in household-debt-financed consumption sustaining aggregate demand despite stagnant real wages, a Minsky-plus-Marx pattern.
gfc_household_debt_wage_stagnation_linkinferred
viaregulatory.financial_deregulationfiscal.transfer_expansionfiscal.spending_level
PARTIAL — coef=-0.01111, p=0; claim direction not auto-inferred
partial
Countries in the top quartile of Heritage judicial effectiveness in 2024 have lower latest-available under-5 mortality than bottom-quartile countries, consistent with free-market country policy regimes outperforming less market-oriented regimes on this outcome.
heritage_judicial_effectiveness_under5_mortality_current_gapinferred
viainstitutional.rule_of_lawfiscal.transfer_expansion
SUPPORTED — top-vs-bottom gap has expected sign - and Welch p=4.272e-10
supported
Conditional on latest real GDP per capita and broad Heritage region, countries with higher Heritage judicial effectiveness in 2024 have lower latest-available under-5 mortality.
heritage_judicial_effectiveness_under5_mortality_income_region_robustnessinferred
viainstitutional.rule_of_lawfiscal.transfer_expansion
SUPPORTED — controlled market-score coefficient has expected sign - and p=0.0374
supported

Similar historical policies

Ranked by axis-fingerprint overlap with this policy. Direction match bolded — those are the closest historical analogues. Shape of the match is what drives policy-outcome comparison, not the country or party label.