As a result of the bank failures of the early 1930s

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The bank failures of the early 1930s led to a decrease in public confidence in the banking system, causing many depositors to withdraw their funds from banks, which in turn led to a decrease in total bank deposits. In response, banks began holding a larger proportion of their deposits as reserves, which increased the ratio of bank reserves to deposits. Therefore, bank reserves as a fraction of deposits rose while total bank deposits fell.

As a Result of the Bank Failures of the Early