A Bank run happens when people flock to the banks to take money out of their accounts.
Here is a commentary:
http://www.marketwatch.com/news/story/could-run-bank-happen-us/story.aspx?guid=%7BDBA148C1-3329-48C0-ADB7-748B133045BF%7D
2007-09-21 03:50:22 · 9 answers · asked by Think Richly™ 5 in Business & Finance ➔ Other - Business & Finance
Sure!
They started FDIC in the 1930s to prevent runs, but the limit on insured funds hasn't kept pace with inflation.
When Oakwood Deposit Bank failed in 2002 due to embezzlement, there was $57.3 million in insured deposits and $2.9 million in deposits that exceeded the $100,000 FDIC limit.
If only the people with uninsured deposits were to withdraw funds, that'd be enough to cause a crisis; banks don't keep that much cash, but instead invest in loans.
But it isn't just the big depositors. Oakwood only closed for one day. In 1933, FDR ordered ALL banks closed for three days, whether sound or failing.
If a bank were to close for Wednesday, Thursday, and Friday, plus the weekend, there are a lot of people who couldn't make it from Tuesday to the following Monday. They wouldn't have food, and they wouldn't have gas to go to work. Consequently, the small depositors, remembering stories their parents or grandparents told about 1933, have ample reason to try to withdraw funds before the bank closes.
2007-09-21 04:16:31 · answer #1 · answered by Anonymous · 3⤊ 0⤋
The variety of banks on the FDIC's "undertaking record" maintains to enhance. the financial issues run deeper than those couple of mess ups point out. The feds are scrambling to shore up the financial establishments yet whilst they might restoration self assurance in the process the tremendous melancholy by ability of putting the load of the federal government in the back of the financial establishments, I have faith they are going to be waiting to do it now.
2017-01-02 11:44:14 · answer #2 · answered by starrett 4 · 0⤊ 0⤋
Heck yeah, it could. Go read Tom Clancy's Debt of Honor, while a work of fiction, there's enough truth in there to make it scary. Good book and it talks about the American Economy being attacked.
2007-09-21 03:57:03 · answer #3 · answered by Joshua B 4 · 1⤊ 0⤋
Sure, it's possible. However, most people don't keep the bulk of their wealth in bank accounts these days. The real danger is a crash of the stock market or of real estate values.
2007-09-21 03:57:28 · answer #4 · answered by Anonymous · 1⤊ 0⤋
It's very possible, considering it's already happened in England just a few days ago.
2007-09-21 11:26:02 · answer #5 · answered by nolajazzyguide 4 · 1⤊ 0⤋
Possible but not likely
2007-09-21 04:02:05 · answer #6 · answered by scottsmylie 5 · 0⤊ 0⤋
No because of the FDIC and 100K per account. That's why they put it in place.
2007-09-21 03:54:44 · answer #7 · answered by lu_dicrous 3 · 0⤊ 1⤋
Has happened before ,
Don't know any reason why it couldn't happen again .
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2007-09-21 03:54:59 · answer #8 · answered by kate 7 · 1⤊ 0⤋
I guess anything is possible.
2007-09-21 04:20:34 · answer #9 · answered by JB 3 · 0⤊ 0⤋