Answer: -Too much money was loaned out to people for risky investments
Explanation: During the 1920's, the positive outlook of the american economy led banks to relax requirements for loans, resulting in a large portion of the populitaion taking debt. The availability of the money given out by loans, led people to take debt in order to invest in the stock market, which resulted in the value rise of stocks in the stock exchange. When the stock market collapsed, the debt invested in the stock market could not be paid by the debtors, as such, many banks were forced to declare bankrupcy.
