Bank run

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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.
References in periodicals archive ?
They find that both proxies are statistically and economically significant predictors of bank failures in the U.
The subsequent panic amongst Chase Bank clients to withdraw their money before a bank failure led to a liquidity crunch and a swift move by the Central Bank of Kenya (CBK) to put the bank under receivership.
Many observers are looking to the regulatory aftermath of the savings and loan crisis of the late 1980s for clues as to how bank failures will ultimately be resolved.
As the European Parliament's lead negotiator on the directive, I have been studying the Cypriot case and other examples of bank failures quite intensively.
But 10 states and the District of Columbia have had no bank failures in that time, and six states have had only one failure.
The New Zealand Government has looked hard at deposit insurance schemes and concluded that they blunt the incentives for investors and banks to properly manage risks, and may even increase the chance of bank failure.
Two closures occurred in Illinois, which has also experienced many bank failures.
The increase in bank failures that began in 2008 was largely precipitated by the collapse of the U.
Georgia leads the country in bank failures, with 12 year-to-date and 64 since the cycle started in 2007.
He teamed up with Oklahoma State University scientist and ASABE member Garey Fox to study how seepage--the lateral movement of water through the ground-- could prompt conditions that led to bank failure.
bank failures for the period 1970 through 2009 with a particular focus on any evidence as to whether these two statutes (FDICIA and RNIBA) exercised impacts on bank failures.
When some experts study bank failures, they aren't scrutinizing the books of badly run financial institutions.