Emergency Banking Act

The Emergency Banking Act, passed in March 1933 during the Great Depression, aimed to stabilize the banking system in the United States. It allowed the government to temporarily close banks to prevent bank runs, where many people try to withdraw their money at once, leading to bank failures. The Act also provided for the inspection of banks to ensure their solvency and authorized the restructuring of financially troubled banks. This legislation restored public confidence in the banking system, facilitating the eventual reopening of banks and helping to stabilize the economy.