Why did so many banks collapse at the beginning of the great depression?

Answer 1

Banks were taking major financial risks, including investing in stocks and bonds. At that time, there were few limits, and fewer regulations, to require banks to be cautious or to protect their customers' money. When the Stock Market crashed in 1929, many of the banks that had not set aside enough capital to cover their losses in case of an emergency found themselves out of money and had to close; their customers, who in most cases had no idea the banks were making risky investments, also lost everything.

Answer 2

1-investors couldn't pay back tha bank

2-banks were left with depreciating assets and little income

3-when cash became low some banks were forced to close

4-with bank failures, customers could lose their entire life savings if their bank is closed many depositors panicked and withdraw their money

5-this caused more banks to close

6-many american business suffered from baniking crisis, industries that already lost money in the stock market crash faces hardships

7-consumers were unable or unwilling to buy products

8-dept and the fear of bank failures bought an end to consumer habit of purchasing new goods on credit

9-many companies were forced to trim inventories, scare back production schedules and lay off employees

10-in the early 1930's businessess began to fail at an alarming rate.

11-26,000 business went bankrip in 1930 and another 28,285 the following year

12-in 1929 US gross national product the total value of all goods and service produced in a given year it reached 103$ billion at the height of depression it fell belo 56$ billion

13-business failed, unemployment, loan crisis, industry, business failure, marked great depression.

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