Banking Crisis of 1933

The Banking Crisis of 1933 occurred during the Great Depression when many banks faced bank runs, meaning large numbers of depositors withdrew their funds fearing collapse. This led to widespread bank failures, loss of savings, and financial instability. To stabilize the economy, the U.S. government closed all banks temporarily in what was called a "bank holiday," inspected and restructured healthy banks, and implemented the Emergency Banking Act. These measures restored public confidence, allowed banks to reopen safely, and helped prevent further economic decline. The crisis highlighted the need for stronger banking regulations and financial safeguards.