Emergency Banking Relief Act
Right after Franklin Delano Roosevelt took office, he declared a bank holiday. Banks before he took office were closing, and fearful people would withdraw their savings, instead keeping them within their own possession. So FDR closed all the banks in the country for four days. During that time period he asked congress to pass the Emergency Banking Relief Act. This act restricted banks from reopening from the bank holiday unless they had enough funds to meet their depositors demands. Reassured that banks were now safer to keep money in than before, people started to put their trust in banks again, and the bank system steadily grew.
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The Federal Deposit Insurance Corporation (FDIC) was put in place as a temporary government program by FDR as part of the Emergency Banking Relief Act. The purpose of the FDIC was too insure safety for the public when they trusted their money to banks. The FDIC provided people with deposit insurance. Deposit insurance guarantees safety of deposits in banks for people. If a bank insured by the FDIC failed, the government would make sure that the people who had deposited their money in the bank would get it back. The FDIC still exists today, even though it was originally intended to be a temporary program.