Bank Run

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Definition

A Bank Run is a situation in which all depositors rush to the bank at the same time to withdraw their money, trying to avoid being the last one in the waiting queue. This threat of bank runs creates an inherent instability for the bank’s business^[1],^[2]

References

↑ Diamond and Dybvig, 1983
↑ Jacklin and Bhattacharya, 1988

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