Final answer:
The Federal Deposit Insurance Corporation (FDIC), established by the Glass-Steagall Act in 1933, guaranteed all bank deposits up to $2,500 to restore confidence in the banking system and prevent bank runs. The coverage amount has increased over time to $250,000 per account as of today.
Step-by-step explanation:
The corporation established in the Glass-Steagall Act which guaranteed all bank deposits up to $2500 was the Federal Deposit Insurance Corporation (FDIC).
The FDIC was created in 1933 to restore trust in the American banking system; at that time, it insured deposits up to $2,500. This limit has since been increased to protect larger sums of money, ensuring that depositors will receive up to $250,000 per account if a bank fails.
The stabilization and confidence this brought to the banking system significantly reduced the occurrence of bank runs, where large numbers of customers withdraw their deposits fearing that the bank might become insolvent.
Originally, the FDIC was part of a broader reform of the banking industry which also included separating commercial banking, investment banking, and insurance services to prevent conflicts of interest—an aspect repealed in 1999. Bank examiners from the FDIC continue to evaluate banks today to ensure financial stability and to protect depositors.