…passed on March 9, 1933…the Emergency Banking Act
…allowed a plan that would close down insolvent banks
and reorganize and reopen those banks strong enough to survive
On March 5, 1933, the day after Roosevelt's inauguration
he called a special session of Congress
which instituted a mandatory four-day bank holiday
This act provided for the reopening of banks
after federal inspectors had declared them to be financially secure
Within 3 days of the act's passage
5,000 banks had passed inspection and were reopened
Roughly two-thirds of US banks quickly reopened
…and faith in banking institutions was somewhat restored
If subsidization can perpetuate instead of solve problems
at what point do bailouts do more harm than good?
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