Final answer:
The collapse of the banking system during the Great Depression resulted in widespread bank failures and a loss of savings for many people. This contributed to the economic downturn as businesses struggled to obtain loans.
Step-by-step explanation:
The collapse of the banking system was one of the key factors that contributed to the Great Depression. When the stock market crashed in 1929, many banks had invested heavily in stocks and lost a significant amount of their assets. This led to widespread bank failures, resulting in people losing their savings and businesses being unable to obtain loans. The lack of banking regulations and the panic among depositors further exacerbated the economic downturn.