Due to banking regulations, banks in the early part of the twentieth century were not allowed to nationalize and thus many banks had most of their investments tied up in the agricultural sector. The Dust Bowl and retaliatory tariffs caused many banks to fail, particularly during the Great Depression. Ignoring legal and cultural restrictions, what piece of advice would have served banks very well during this time?

Question

Quizplus · Accepted Answer

Having investments in only one sector, like agriculture, would have made those banks vulnerable to economic disruptions. Diversification would have helped spread the risk across a variety of industries and investments.

Due to Banking Regulations, Banks in the Early Part of the Twentieth