Difference between revisions of "Bank Run"

From Open Risk Manual
(Created page with "== 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 w...")
 
(No difference)

Latest revision as of 17:12, 29 September 2021

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

  1. Diamond and Dybvig, 1983
  2. Jacklin and Bhattacharya, 1988