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1920s Credit Bubble Insights
- The 1920s saw a surge in credit use and risky investments, fueling the Great Depression in 1929.
- Low interest rates and easy borrowing created an unsustainable financial bubble.
Bank Runs Worsened Great Depression
- Lack of deposit insurance in the 1930s caused widespread bank runs and failures.
- The Federal Reserve failed to act as lender of last resort, worsening the crisis.
Solutions From 1933 Recession
- Deposit insurance and bank holidays restored confidence and stopped bank runs in 1933.
- New financial regulations and oversight emerged to stabilize the economy after the crash.