Firewall

DEFINITION of 'Firewall'

Legal barriers that prevent both the transference of inside information and the performance of financial transactions between commercial and investment banks.

BREAKING DOWN 'Firewall'

Restrictions placed on collaborations between banks and brokerage firms under the Glass-Steagall Act of 1933, acted as a form of firewall.

This works similarly to fire wall software and hardware used in preventing or limiting outside access to a company's internal servers and networks.

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RELATED FAQS
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    Learn about the gradual relaxation of the strict banking regulations under Glass-Steagall, eventually culminating in the ... Read Answer >>
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  3. How did the Glass-Steagall Act affect commercial and investment banking?

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