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Bank Run
(redirected from Run on a Bank)

   Also found in: Dictionary/thesaurus, Wikipedia 0.01 sec.
Bank run (bank panic)
A series of unexpected cash withdrawals caused by a sudden decline in depositor confidence or fear that the bank will be closed by the chartering agency, i.e. many depositors withdraw cash almost simultaneously. Since the cash reserve a bank keeps on hand is only a small fraction of its deposits, a large number of withdrawals in a short period of time can deplete available cash and force the bank to close and possibly go out of business.

Bank Run
An event in which many account holders at a bank withdraw all of their funds at the same time because they do not believe the bank is solvent. Ironically, the pressure of a bank run itself can cause the bank to become insolvent. In the United States, bank runs were fairly common before the creation of the FDIC, which insures bank deposits up to a certain amount. See also: Panic.


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In fact, modern information and communications technology means we could have a run on a bank and hardly be aware of it.
Mr Osborne said Mr Darling had dithered over the Northern Rock crisis - the first run on a bank in Britain since Victorian times - and then been sidelined by Prime Minister and former chancellor Gordon Brown.
Chancellor Alistair Darling wants to adopt the US-style safeguard to prevent another run on a bank.
 
 
 
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