Changes

A '''bank run''' is a series of unexpected large cash withdrawals from a [[bank]] caused by a sudden decline in depositor confidence or fear that the bank will be closed by the chartering agency, i.e. many depositors withdraw cash almost simultaneously. Since the cash reserve a bank keeps on hand is only a small fraction of its deposits, a large number of withdrawals in a short period of time can deplete available cash and force the bank to close and possibly go out of business.

A '''bank run''' is a series of unexpected large cash withdrawals from a [[bank]] caused by a sudden decline in depositor confidence or fear that the bank will be closed by the chartering agency, i.e. many depositors withdraw cash almost simultaneously. Since the cash reserve a bank keeps on hand is only a small fraction of its deposits, a large number of withdrawals in a short period of time can deplete available cash and force the bank to close and possibly go out of business. Bank runs are a risk for every bank that operates under a [[fractional-reserve banking]] system.<ref>Mankiw, N.G. [http://books.google.com/books?id=58KxPNa0hF4C&lpg=PA353&dq=bank%20run%20fractional-reserve%20banking&pg=PA353#v=onepage&q=%22bank%20runs%20are%20a%20problem%20for%20banks%20under%20fractional-reserve%20banking%22&f=false ''Principles of Macroeconomics'']; South-Western Cengage Learning; Mason, OH. Page 353, (2008)</ref>

 

==Sources==

==Sources==

==See also==

==See also==

 

* [[Financial Crisis of 2008]]

* [[Financial Crisis of 2008]]

* [[Great Depression]]

* [[Great Depression]]

* [[Panic of 1893]]

* [[Panic of 1893]]

* [[Panic of 1907]]

* [[Panic of 1907]]

[[Category:Business]]

[[Category:Business]]

[[Category:Economic history]]

[[Category:Economic history]]