Why were banks one of the first institutions to feel the effects of the stock market crash?

I think its Frightened depositors feared for their money and tried to withdraw it from their banks.

Answered by xQueenxDanyellx | 2024-06-10

Banks were among the first institutions affected by the 1929 stock market crash due to their significant investments in stocks, lack of cash reserves, increased bank runs, and subsequent tightening of credit. This resulted in bank failures that devastated communities and further deepened the economic crisis. The interconnected financial system meant that the effects of the crash rippled through the entire economy.
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Answered by Anonymous | 2024-12-26