What Is a Bank Run?
The fear alone can be what makes it happen.
Video coming soon. The lesson video will appear here once it is published on YouTube.
Check yourself: sample questions
Think about each question, pick what you would answer if you like, then select “Show answer” to see the solution and why. Nothing is graded or sent to us. Example numbers are worked examples, not predictions.
1.What is a bank run?
The fear alone can be what makes it happen.
2.Is it true that only bad banks suffer bank runs?
From the fall of 1929 to the end of 1933 about 9,000 US banks stopped operating; about 4,000 closed in early 1933 and the president declared a bank holiday on March 6, 1933.
3.What did Diamond and Dybvig model in 1983?
Which one happens depends on what customers expect other customers to do.
Full course: 4 more questions for this lesson
The full course unlocks all self-check questions of all 365 lessons, the daily plan, your progress and the printable learning record. Lessons 1 to 7 are completely free.
See the full course Start the free week
Already bought? Open the course on this device
Sources (6)
- Diamond, D. W. and Dybvig, P. H. (1983), Bank Runs, Deposit Insurance, and Liquidity, Journal of Political Economy 91(3), 401-419; Nachdruck Minneapolis Fed Quarterly Review (Winter 2000)
- Federal Reserve Board, FEDS Notes: The Runnables (3.9.2015)
- FDIC, The First Fifty Years: A History of the FDIC 1933-1983
- FDIC, Understanding Deposit Insurance
- Federal Reserve Board, Review of the Federal Reserve's Supervision and Regulation of Silicon Valley Bank, Executive Summary (28.4.2023)
- Eigene Berechnung (Modellbank
Education only. Not financial advice.