How did poor banking practices cause the great depression?

Poor banking practices contributed to the Great Depression by fostering a climate of speculation and risk-taking. Many banks engaged in unsafe lending, extending credit to unqualified borrowers and investing heavily in the Stock Market. When the stock market crashed in 1929, these banks faced massive defaults on loans and a loss of deposits, leading to widespread bank failures and a loss of public confidence in the financial system. This resulted in a severe contraction of credit, exacerbating the economic downturn.