Elyon holds a savings account in the Rochester City Bank in the United States. During an economic downturn, the bank suffers great losses. Elyon, however, is insured under the Federal Deposit Insurance Corporation and his savings are protected as the insurance covers his deposit value. Which of the following laws ensured the protection of depositors from a bank's failure?

A. The Sarbanes-Oxley Act

B. The Glass-Steagall Act

C. The Gramm-Bliley-Leach Act

D. The Securities Act

B) The Glass-Steagall Act

Explanation:

The Glass-Steagall Act was passed in 1933 and its main purpose was to divide banking activities into investment banks and commercial banks. Banks had to be either one of them, but they couldn't offer both services. It was finally repealed in 1999 by the Financial Services Modernization Act of 1999 which currently allows banks to provide both commercial and investment services.

The Glass-Steagall Act was extremely controversial at its time and it barely passed because Senator Carter Glass didn't have enough support for his law until Representative Henry Bascom Steagall joined him after the law included the creation of the Federal Deposit Insurance Corporation. The FDIC was created in 1933 just after the law was approved and since then it insures depositors from bank failures.

Option B The Glass-Steagall Act

Explanation:

According to the Glass-Steagall Act, the commercial banking was separated from the investment banking. This was made to provide the investor investment security by creation of the Federal Deposit Insurance Corporation.

So here Elyon will be entertained with the imbursement of the amount at the deposit value which the insurance will safeguard the depositor's value due to bank failure.