Final answer:
The stock market crash led to bank runs as people feared losing their savings deposited in banks, causing banks to fail due to insufficient cash reserves and worsening the economic downturn.
Step-by-step explanation:
The stock market crash mainly led to bank runs because people were panicked they would lose their money saved in banks. This fear was due to the financial collapse that hurt the banks' investments in stocks, the lack of banking regulations, and the absence of government insurance for bank deposits at the time. The subsequent bank runs saw many customers rush to withdraw their funds, often causing the banks to fail because they did not hold enough cash reserves to meet the demand of all depositors.
With banks unable to return deposits and curtailing their lending practices, this also had wider economic consequences, strangling credit for businesses and individuals and deepening the economic downturn into the Great Depression.