The Bank Holiday of 1933

As I mentioned on Sunday's radio program, there are rumors (unsubstantiated) that the government may call a "bank holiday" in September. A bank holiday is when the government closes the banks for a number of days to prevent a bank "run" and then decides which banks should be closed or merged with healthy banks. The FDIC would most likely receive a large cash infusion from Congress to instill confidence that savings accounts would be insured. If it happened then chaos would ensue for sure. To be safe make sure you have enough cash and food on hand to last a month. Here is the story of what transpired during the last bank holiday in 1933, let's hope it doesn't happen any time soon.-Lou

http://www.bos.frb.org/about/pubs/closed.pdf