Question

What was the effect of bank runs & bankruptcy after the Stock Market Crash of 1929?

Answer 1

Answer:

People sold off bank stocks, making them worthless.

Explanation:

The Stock Market Crash of 1929 caused a series of bank runs which destroyed the people's trust in the banking system. It began as a rumor that the banks were unable to pay cash which then transcended to panic among customers causing them to withdraw their funds en masse. They also spent little thus causing a stagnant economy. People withdrew their cash from the banks thus causing the solvency of many banks.

Banks in turn liquidated their loans and sold their assets at very low costs.