system
Given the following post, respond as if you're commenting on Reddit:
human
The Glass-Steagall act and why it may (or may not) be to blame for our current economic conditions.
gpt
The very basic idea of Glass-Steagall was to enforce a separation between banks that handle consumer accounts like savings and checking, and financial companies that try to make money on the market or by creating and selling more complicated financial products such as derivatives.  Those latter activities allow for much higher profits, but also come with greater risks of losing everything.  If you keep the basic banks separate from those activities, far fewer of them will fail; also, the government can insure people's deposits in case banks do fail, without having the side effect of government insurance for riskier and more speculative activities.

Glass-Steagall seems to have worked pretty well from when it was passed during the recovery from the Great Depression in the 30s, until federal regulators started reinterpreting it in weaker ways and allowing more exceptions 50 years later in the early 80s, and then it was eventually finally repealed in the late 90s.  Once that happened, a lot of regular banks and investment banks merged with each other and became giant megabanks with both consumer banking and speculative activities as part of their business.

Whether that's "to blame" for our current economic conditions is not a simple yes/no question, but it does quite clearly seem to have contributed a lot of problems to the situation.  For one thing, it means that when an investment bank fails, it takes with it a lot of consumer bank accounts.  For another, it means that a large financial company that has a lot of consumer accounts is benefiting from cheap FDIC insurance on lots of that money, while using that money to make very risky bets in the markets, which gives them unfair advantages against other banks, a form of government subsidy.  It also means that a lot more consumer money gets funneled into riskier financial activities.