Final answer:
In 1933, over 1,000 banks failed as part of the Great Depression, following the stock market crash of 1929. Lack of regulation, bank runs, and loss of value in bank investments contributed to this crisis. Lehman Brothers' 2008 bankruptcy marked another crisis, leading to 318 bank failures from 2008 to 2011.
This correct answer is a.
Step-by-step explanation:
The Origin of the Banking Crisis
More than 1,000 banks failed and led to a major banking crisis in the year 1933. This event was part of the Great Depression which followed the stock market crash of 1929. Banks were heavily invested in the stock market, and when prices plummeted, the banks' assets lost significant value.
This, combined with a lack of banking regulations and a series of bank runs where customers withdrew their deposits fearing bank failures, exacerbated the crisis. By 1933, over 9,000 banks had closed their doors. Additionally, in more recent history, the 2008 financial crisis saw another significant moment when the investment banking firm Lehman
Brothers went bankrupt, signaling the onset of a major economic downturn. During the period from 2008 to 2011, the United States experienced 318 bank failures, as banks found themselves with mortgage-backed securities that drastically lost value due to falling housing prices and a deepening recession.
This correct answer is a.