History Franklin D Roosevelt Questions Medium
Franklin D. Roosevelt's administration addressed the issue of banking and financial reform through a series of measures known as the New Deal. Upon taking office in 1933, Roosevelt declared a bank holiday, temporarily closing all banks to prevent further panic and runs on the banks. This allowed the government to assess the financial health of each bank and only reopen those deemed stable.
To restore confidence in the banking system, Roosevelt signed the Emergency Banking Act, which provided federal assistance to banks in need and established the Federal Deposit Insurance Corporation (FDIC). The FDIC insured bank deposits up to a certain amount, ensuring that people's money would be protected even if a bank failed.
Additionally, the administration passed the Glass-Steagall Act, which separated commercial and investment banking activities. This aimed to prevent banks from engaging in risky investment practices with depositors' money, reducing the likelihood of another financial crisis.
Roosevelt also established the Securities and Exchange Commission (SEC) to regulate the stock market and prevent fraudulent practices. The SEC required companies to disclose accurate financial information to investors, increasing transparency and reducing the potential for market manipulation.
Furthermore, the administration created the Home Owners' Loan Corporation (HOLC) and the Farm Credit Administration (FCA) to provide relief to homeowners and farmers struggling with mortgage and debt payments. These agencies refinanced loans and provided assistance to prevent foreclosures and bankruptcies.
Overall, Roosevelt's administration implemented a comprehensive set of measures to address the banking and financial crisis of the Great Depression. These reforms aimed to stabilize the banking system, protect depositors, regulate the stock market, and provide relief to struggling homeowners and farmers.