Question

Why did banks fail during the Great Depression?

Answer 1

Answer: During the Great Depression years—1930 through 1933—5.6% (1,352 banks), 10.5% (2,294 banks), 7.8% (1,500), and 12.9% (4,000) of U.S. banks failed in each year; by the end of that four-year stretch, almost half of U.S. banks had either closed or merged.

Explanation: The Real Cause of Bank Failures During the Great Depression. The Great Depression is often said to have been triggered by the Wall Street Crash of 1929 which is said to have caused many of the bank failures in late 1929 early 1930. The real cause is government policies.