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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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
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