The Emergency Banking Act was enacted in March 1933 during the Great Depression to stabilize the U.S. banking system. It allowed the federal government to inspect and close banks that were financially unstable, ensuring that only sound institutions could reopen. This aimed to restore public confidence in the banking system and prevent further bank runs. The act also provided federal assistance to banks in need, enabling them to meet their obligations. By establishing a framework for bank regulation, the Emergency Banking Act laid the groundwork for future reforms and helped to stabilize the economy during a critical period in American history.