BANK RUNS Explained

Bank runs occur when a large number of customers withdraw their deposits from a bank simultaneously, driven by a fear that the bank may become insolvent or unable to meet its obligations. This panic can spread quickly, causing even more people to withdraw their funds, putting the bank under severe financial stress. In extreme cases, a bank run can lead to the collapse of the bank if it does not have enough liquid assets to meet the sudden surge in withdrawal demands.

Bank runs can be triggered by various factors, such as rumors of a bank's financial troubles, a crisis in the broader financial system, or an event that shakes public confidence in the banking sector. To prevent bank runs and protect depositors, governments often establish deposit insurance programs, which guarantee a certain amount of deposits per customer in case a bank fails. Additionally, central banks can serve as a lender of last resort, providing emergency liquidity to banks facing severe cash shortages during a crisis.

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[rationalmoney]

We might be seeing a global bank run developing right now!