The Special Case of Banking Banks are a special case when it comes to regulation. On one hand, they are private businesses just like toy manufacturers and steel companies. But they also play a central role in the economy and therefore affect the well-being of everybody, not just their own consumers. Since the 1930s, Americans have devised regulations designed to recognize the unique position banks hold. One of the most important of these regulations is deposit insurance. During the Great Depression, America's economic decline was seriously aggravated when vast numbers of depositors, concerned that the banks where they had deposited their savings would fail, sought to withdraw their funds all at the same time. In the resulting "runs" on banks, depositors often lined up on the streets in a panicky attempt to get their money. Many banks, including ones that were operated prudently, collapsed because they could not convert all their assets to cash quickly enough to satisfy depositors. As a result, the supply of funds banks could lend to business and industrial enterprise shrank, contributing to the economy's decline.