What is a bank run and what can cause it?

Рет қаралды 3,311

Жыл бұрын

When the conviction of a bank's insolvency spreads among its customers, there is a bank run and a massive withdrawal of money from the bank.
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Пікірлер: 10

@seymagulnihalyildiz6488 2 ай бұрын

thanks, that was helpful!

@Omer1996E.C Жыл бұрын

EconClips is a blessing in disclosure

@austinbyrd4164 Жыл бұрын

Disguise

@Omer1996E.C Жыл бұрын

@@austinbyrd4164 that's the opposite of what I meant

@DiegoAguila-rb1gz 2 ай бұрын

Great explanation of the bank run itself, but what causes people to want to withdraw their funds en masse? Why all of the sudden lose confidence in the bank?

@idoko327 11 ай бұрын

Thanks ., Very impressive videos

@acem82 Жыл бұрын

And I'll add in that FDIC "insurance" creates a moral hazard. Banks no long really have to worry too much about risky investments because if it falls through, the depositors of $250,000 or less will be covered by the FDIC. Therefore, the banks make more risky investments than they otherwise would. That will lead to disaster sooner or later. As Hazlitt pointed out in "Economics in One Lesson", in any given policy/act/proposal, it is wrong to: 1 only look at the immediate consequences, and 2 looking at the consequences only for a particular group and neglect the whole. Another way to put this is every economic policy has secondary consequences that often do the opposite of the intended effect of the policy.