Emergency Banking Act Of 1933

Definition

Federal bill passed following the Great Depression requiring a four-day closing of US banks. The Act allows Congress to examine banking conditions, and requires authorities to determine which institutions must close and which may be reorganized to remain solvent. The Act is intended to prevent massive fund withdrawals (called a "run on the bank") during crisis periods of low consumer and investor confidence.

Use this term in a sentence

The Emergency Banking Act of 1933 helped the US government alleviate some of the fears and restore credibility to banks during the Great Depression.

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