Recent Comments "A bank run is a self-fulfilling prophecy. As the probability of bank failure increases, more depositors seek to withdraw their money and fewer lenders are willing to loan short term funds to the bank." September 25 2008: Washington Mutual closed by federal regulators amid bank run by depositors who withdraw over 16 Billion in assets in just 10 days. |
Information on Bank Runs past and presentA Bank Run is an event in which liquidity at a bank drops due to depositors withdrawing their funds. At some point, a bank will run out of available cash to service its clients and it will close its doors to additional withdrawls. The effect of such runs is that they cause increased panic, as more banks close their doors and less and less cash is available. Until the government can take action, these massive cash drains impede the ability of the economy to function.
It is literally impossible to prevent a bank run in a major crisis. As depositors gain fear, they lose confidence and begin withdrawing their funds as quickly as possible. This is out of fear that if they are the last ones to get to the bank, there will be nothing left. A prophecy that often comes true. We have all the informaiton on Bank Runs in the US and some abroad at foreign institutions. Our goal is to keep everyone in the United States aware as to the status of these runs the minute the happen. Our goal is to keep an eye on bank failures, runs and capital depreciation of the major financial institutions in the US and abroad. By visiting our Forums, you can help by participating in user-generated news and opinions, targetted directly to the liquidity of the global banking markets.
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