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Bank Run

A bank run occurs when many customers of a bank or other financial institution withdraw their funds at the same time, usually over fears about the stability of the bank.

The risk of a bank collapsing increases as more people withdraw their funds, which motivates even more people to withdraw funds. For this reason, banks have often failed due to bank runs.

Bank Run

Silicon Valley Bank, one of the largest tech-oriented financial institutions, failed in 2023 due to a rush of withdrawals. Photo courtesy of Minh Nguyen.

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Deposit Insurance

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