Question

How did the Banking Act of 1933 make banks more stable in the long run?

Answer 1

By setting up a new system of how the banks worked.

Answer 2

The Emergency Banking Act of 1933 was a law passed during President Roosevelt's administration in response to the financially adverse conditions of the Great Depression and sought to reintroduce investor confidence and stability in the banking system.

Americans' confidence was shaken by bank losses. It was a time when there was no government security for the deposits. The law instituted complicity requirements and institutionalized a governmental enforcement apparatus. Banks have come to meet stricter requirements and regulations.

The Banking Law was successful as it regained Americans' confidence in banks and prevented another collapse over time.