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The Truth About Bank Runs

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Book cover The Financial Services Revolution

Part of the book series: Innovations in Financial Markets and Institutions ((IFMI,volume 1))

Abstract

Bank runs have taken a bum rap. A shout of “run” strikes the same fear into most of us as a shout of “fire” in a crowded room might. After all, it is better to be safe than sorry. Not only will depositors run to the affected bank to withdraw their funds, but depositors elsewhere may also run on unaffected banks. Bank runs are frequently viewed as contagious, with people thinking, “If my neighbor’s bank is in trouble, maybe mine is also.” Thus, a run on one bank is believed capable of causing not only that bank to fail but also, domino fashion, the failure of a large number of banks nationwide, thus destabilizing the financial system if not the economy as a whole.

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Authors
  1. George G. Kaufman
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Catherine England Thomas Huertas

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© 1988 The Casto Institute

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Kaufman, G.G. (1988). The Truth About Bank Runs. In: England, C., Huertas, T. (eds) The Financial Services Revolution. Innovations in Financial Markets and Institutions, vol 1. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-3277-7_2

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  • DOI: https://doi.org/10.1007/978-94-009-3277-7_2

  • Publisher Name: Springer, Dordrecht

  • Print ISBN: 978-94-010-7971-6

  • Online ISBN: 978-94-009-3277-7

  • eBook Packages: Springer Book Archive

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