In 1927, the McFadden Act was passed in the United States. Indeed, it rendered void US financial institutions of the ability to partake in interstate branch banking and as such, the banks, as a function of only being able to operate branches within a single state, procured undiversified loan portfolios. Canada had no such laws, ergo, its banks were much stronger as a result of a much more acute degree of financial freedom procuring a much more developed and robust financial system. As a result, US banks largely lacked the fortitude of Canadian financial institutions during the Great Depression which rendered 9000 American banks insolvent. Not a single bank in Canada went bankrupt during the Great Depression. Although branch banking did not play quite a significant role in the failure of American financial institutions, it certainly did, to whatever extent, curtail the ability of American financial institutions to withstand economic shocks
1914-1929 