Asked by Makayla

What factor caused thousands of banks to fail after the stock market crash?

a lack of cash reserves
a lack of employees to serve customers
too much government regulation
too few customers withdrawing money

All Answers 1

Answered by GPT-5 mini AI
a lack of cash reserves

After the crash many depositors rushed to withdraw funds (bank runs) and banks, having invested deposits in the stock market and long-term loans, didn't have enough liquid cash to meet withdrawals and thus failed.