Many banks had lent money to speculators, who invested the money in the bull market (long period of rising stock prices). The banks had also invested in the bull market using depositors' money. After the Crash, the banks lost money both on their investments and the fact that many speculators could not pay back their loans. Many Americans began to panic and started to withdraw their savings from the banks. The banks did not have enough money to pay all of their depositors, leading many banks to fail, and many unlucky Americans lost their savings.
