Bank Run
A bank run is a situation in which a large number of customers of a bank or other financial institution withdraw their deposits simultaneously due to concerns about the solvency of the institution. Bank runs can cause a financial crisis, as they can result in a loss of confidence in the banking system and can lead to a loss of liquidity for the bank. Bank runs can be triggered by a variety of factors, including rumors, economic downturns, and changes in government policy.
History of Bank Runs
Bank runs have been a feature of banking since the early days of banking. The first recorded bank run occurred in 1696 in England, when a group of customers of the London goldsmiths withdrew their deposits due to concerns about the solvency of the institution. Since then, bank runs have occurred in many countries, including the United States, where the most famous bank run occurred in 1933 during the Great Depression. Bank runs have also occurred in other countries, including Japan in the 1990s and China in the 2000s.
Comparison of Bank Runs
| Country | Year | Number of Bank Runs |
|---|---|---|
| England | 1696 | 1 |
| United States | 1933 | Many |
| Japan | 1990s | Several |
| China | 2000s | Several |
Summary
A bank run is a situation in which a large number of customers of a bank or other financial institution withdraw their deposits simultaneously due to concerns about the solvency of the institution. Bank runs have been a feature of banking since the early days of banking, and have occurred in many countries, including the United States, Japan, and China. For more information about bank runs, please visit the websites of the Federal Reserve Bank of New York, the Bank of Japan, and the People’s Bank of China.
See Also
- Financial Crisis
- Liquidity
- Deposit Insurance
- Run on the Bank
- Bank Panic
- Credit Crunch
- Financial Contagion
- Financial Crisis of 2007-2008
- Great Depression
- Banking Crisis
