system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: The Glass-Steagall Act

I've seen some reports in the news in the past week that Elizabeth Warren and John McCain want to bring back The Glass-Steagall Act. 

Can somebody explain to me like I'm five what the act included, what it did, and what effects it would have today? 

Thanks a ton.
gpt
The Glass-Steagall Act prohibited commercial banks from engaging in investment banking and securities activities. To understand what this means, you need to understand the three core activities that banks engage in: commercial banking, investment banking, and securities brokerage and dealership. 

They are as follows: 

* **Commercial banking** is the taking of deposits and the making of loans. A traditional commercial bank borrows money in the form of deposits that pay a lower interest rate and lends the money to consumers and businesses at a higher interest rate. It makes money on the spread between the two rates. 

* **Investment banking** is the underwriting of securities. Consider when a big company does an initial public offering. It wants to sell $1 billion of stock to the public. An investment bank agrees with the company that the investment bank will buy the shares from the company and market them to the public. 

* **Securities brokerage and dealership** is the facilitation of the trade of securities in the secondary market. After the company in the above example does its IPO, its shares will trade on the open market. Securities houses facilitate these trades by acting as brokers and by holding an inventory of the securities for sale. 

The latter two activities, call them "securities activities," are generally considered more risky than traditional commercial banking. The idea behind the Glass-Steagall Act was that commercial banks, the holders of America's savings, needed to be kept separate from those risky securities activities. Some people think the repeal of the Act contributed to the financial crisis.