Bank run

A Bank run is a panic response which occurs when a large number of people in a short time take their savings out of a bank, which they fear is financially unsound and about to collapse. This is much more likely to occur if the bank exists within a gold standard (or other specie-backed) system, where bank notes are redeemable for gold.

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A bank run begins when the public begins to suspect that a bank may become insolvent. As a result, individuals begin to withdraw their savings. This action can destabilise the bank to the point where it may in fact become insolvent: no bank has enough reserves on hand to cope with everyone taking their savings out at once. It is this gap which banks exploit to earn interest. The increasing number of people removing their savings can destroy the ability of the bank to do business, thus forcing it into insolvency. It is therefore people trying to protect their savings that precipitates the ultimate collapse of the bank.

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A bank run has much in common with the reflexive processes described by George Soros, amongst others. Another example of a reflexive process is economic bubble.

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Panic: Panic is a sudden fear which dominates thinking and often affects groups of people or animals. Panics typically occur in disaster situations, and may endanger the overall health of the affected group. The word panic derives from the name of the god Pan in Greek mythology, who supposedly struck fear ...

Savings: REDIRECT Saving...

Bank: The essential function of a bank is to provide services related to the storing of deposits and the extending of credit. The evolution of banking dates back to the earliest writing, and continues in the present where a bank is a financial institution that provides banking and other financial services...

Bank run related Images and Photos (experimental)

Bank	Run	Run, Fat Boy, Run (BD/WS)	Run, Fat Boy, Run (FS/WS)
Run Lola Run	Run Lola Run	Run Ronnie Run (DVD)	Last Run, The (Remastered)
The Run	South Bank	Rabbit Run (DVD)	Bull Run