Bank Run
| A bank run is an instance when a large group of depositors simultaneously withdraw their funds from a bank, a crypto exchange, or another financial institution, generally out of concern that the institution will run out of funds. When a bank run occurs, it can cause a domino effect as depositors at other banks or financial institutions may also attempt to withdraw their funds. This can quickly lead to a loss of confidence in the banking system and a decrease in the availability of credit. Bank runs can be triggered by a number of factors, including rumors or news of financial difficulties at a particular bank, a general loss of confidence in the banking system, or a sudden increase in withdrawals for other reasons (such as to meet unexpected expenses). While bank runs can have devastating effects, they are also relatively rare. In most cases, banks are able to weather the storm and continue operating normally. However, there have been a few notable exceptions, such as the runs on Northern Rock in the United Kingdom in 2007 and on Washington Mutual in the United States in 2008. |
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