Question

"By the 1990s, most economists supported the repeal of the Glass-Steagall Act, arguing that the separation of commercial banking from investment banking ________ competition in the market for investment banking services and ________ opportunities for economies of scope in banking."

Answer 1

Increased, reduced.

Step-by-step explanation:

The Glass-Steagall Act separated investment and commercial banking activities. It was initially a response to the commercial bank involvement in stock market investment which was the main culprit of the financial crash that resulted to Great Depression. Due to this act, banks were separated into commercial and investment banking depending on their specializations.

The act was latter rejected by most economists and replaced by the Gramm-Leach-Bliley Act which eliminated the restrictions against affiliations between commercial and investment banks.