Bank Holidays, Conversion or Confiscation of Accounts and New Currency
During severe financial crises, sometimes governments close banks. Depositors may be unable to withdraw their money for long periods, as was true in the United States in 1933 under the Emergency Banking Act. Withdrawals may be limited. Bank deposits may be involuntarily converted to government bonds or to a new currency of lesser value in foreign exchange.
During financial crises and even less severe situations, capital controls are often imposed to restrict or prohibit transferring or personally taking money, securities or other valuables out of a country. To end hyperinflations a new currency is typically issued. The old currency is often not worth exchanging for new.
See also: Financial repression
Read more about this topic: Economic Collapse
Famous quotes containing the words bank, conversion, confiscation, accounts and/or currency:
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—Lewis H. Lapham (b. 1935)
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—Rutherford Birchard Hayes (1822–1893)