Creditanstalt's 1931 collapse intensified the Great Depression and spread panic through European markets.
Creditanstalt was Austria's largest bank and had been formed in 1855. Years of post-World War I economic weakness, industrial losses, and bad loans left it vulnerable. In May 1931, the bank disclosed losses that were far larger than its available capital, triggering a crisis of confidence.
The Austrian government and the Austrian National Bank tried to support Creditanstalt, but the rescue could not prevent deposit withdrawals and broader financial stress. The shock spread internationally as investors and depositors became more cautious about banks in Germany and elsewhere in Europe.
Creditanstalt's failure did not alone cause the Great Depression, which had begun after the 1929 U.S. stock-market crash. It did, however, turn a severe economic downturn into a deeper banking and credit crisis. It is sometimes confused with the 1931 failure of Germany's Danatbank, another major event in the European banking crisis.