Final answer:
The Emergency Banking Act (bank holiday) was enacted in 1933 amidst a banking crisis. It took several steps for financial stability, including abandoning the gold standard and granting power to the comptroller of currency to restructure insolvent national banks. After a thorough inspection by federal auditors, 70% of banks were considered solvent and allowed to reopen.
Step-by-step explanation:
The Emergency Banking Act (bank holiday), was signed into law on March 9, 1933, during one of the worst periods in the country's banking history. This law was created to stabilize the banking system following numerous bank runs and closures, leading to more than five thousand banks being shut down. Under Roosevelt's administration, within 48 hours of his inauguration, an official bank holiday was declared and Congress was summoned to address the crisis.
The Emergency Banking Act of 1933 took several crucial steps to assure financial stability. It took the country off the gold standard and gave the comptroller of currency the power to restructure all national banks facing insolvency. Extreme federal oversight, uncommon before the Great Depression, went into action. Between March 11 and 14, auditors from the Reconstruction Finance Corporation, the Treasury Department, and other federal agencies inspected each bank nationwide. By March 15, 70% of the banks were deemed solvent and permitted to reopen.
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