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In the time of the stock market crash, deposit insurance did not yet exist and without much cash on hand, banks become highly endanger of runs. A run was the result of the depositors becoming fearful of a bank closure and, in return, immediately withdrawing their savings. For the common American, the increasing problem of collapsing banks became an unnerving new development. Roosevelt addressed those problems of fear or distrust with the Federal Deposit Insurance Cooperation, or the FDIC.
The FDIC provided depositors with a new comforting fallback plan; their savings were protected by government insurance...
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