Bank Run

A bank run is a situation where a large number of depositors withdraw their money from a bank simultaneously, typically out of fear that the bank is at risk of failing.

This can cause a chain reaction where other depositors also try to withdraw their funds, which can further exacerbate the bank’s financial difficulties and potentially lead to its collapse.

A bank run can be triggered by a variety of factors, such as rumors of insolvency, a downturn in the economy, or a loss of confidence in the banking system.

Bank runs can have serious economic consequences, including widespread bank failures, a contraction of credit, and a sharp decline in economic activity.