Most important for commercial banking were creation of the Federal Deposit Insurance Corporation (FDIC) and the Glass-Steagall Act. Glass-Steagall sharply limited both the securities business of commercial banks and their affiliations with securities firms. Creation of the FDIC addressed the problem of runs and panics by insuring the bank accounts of the vast majority of Americans.
With the new insurance, retail deposits became a highly stable source of relatively attractive financing for banks, supported by the 1933 statutory prohibition of interest payments on demand deposits and the Fed's Regulation Q upper limit on interest rates paid on savings deposits, which together suppressed competition for deposits among banks.