What was the significance of the Financial Services Modernization Act of 1999?

The Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act, marked a significant change in the regulation of financial institutions in the United States. By allowing financial institutions to offer similar products, the Act effectively repealed the Glass-Steagall Act's provisions that had previously separated commercial banking, investment banking, and insurance services. This change enabled banks, insurance companies, and securities firms to affiliate and offer a full range of financial services to consumers. As a result, consumers benefitted from more competitive pricing, enhanced product offerings, and an overall increase in the efficiency of financial services.

The other options do not accurately reflect the main purpose of the Act. The Act did not restrict banks from selling insurance; rather, it enabled them to enter the insurance market. It also did not eliminate investment companies; instead, it allowed these companies to operate more freely alongside traditional banks. Lastly, while the Act did bring some consolidation in terms of regulating financial services, it did not standardize banking regulations across states but rather created a more unified framework for institutions to operate within.