Banking Practice Exam

The Gramm-Leach-Bliley Act is the correct answer because it specifically repealed the provisions of the Glass-Steagall Act that prohibited commercial banks from affiliating with securities firms and insurance companies. Enacted in 1999, this legislation marked a significant shift in the financial services industry, allowing for the creation of financial institutions that could offer a combination of banking, securities, and insurance services under one roof. This change was intended to foster competition in the financial sector and enhance consumer choices, reflecting a broader trend towards financial deregulation during that era.

In contrast, while the Sarbanes-Oxley Act focuses on corporate governance and financial practices in response to accounting scandals, it does not address the affiliations of banks and securities firms. The Bank Holding Company Act is primarily concerned with regulating the organization and activities of bank holding companies, but it did not repeal the specific restrictions set by Glass-Steagall. The Competitive Equality Banking Act aimed to enhance the competitiveness of banks, but it did not directly address the affiliation issues that were resolved by the Gramm-Leach-Bliley Act.