Final answer:
The bill aimed at primarily protecting larger banks from the domino effect of smaller bank failures was the Emergency Banking Relief Bill of 1933. It allowed financially stable banks to reopen with federal support and offered federal loans to prevent bank failures. The Banking Act of 1935 further reformed the system, creating a central board of governors to oversee banks.
Step-by-step explanation:
The bill explicitly designed to protect the larger banks from the weaknesses of smaller banks was the Emergency Banking Relief Bill, which President Franklin D. Roosevelt signed into law on March 9, 1933. This bill authorized federal examiners to assess the financial health of banks, allowing those that were deemed sound to reopen with federal backing. Additionally, it gave the government the authority to provide federal loans to prevent bank failures.
In contrast to its help for larger banks, the bill offered minimal assistance for smaller banks, leading to the collapse of many such institutions. The larger banks that acted prudently were not fully compensated according to free-market principles due to the failure of their irresponsible competitors, which sparked some criticism of the measures as socialistic. However, these acts were seen as necessary to save the free market and to avert a second Great Depression. Another important piece of legislation that aimed to reform the banking system and protect larger banks was the Banking Act of 1935. This act established a seven-member board of governors to oversee regional banks and secure government control over numerous aspects of banking policy.