Definition

Noun: A bank run is a situation where many customers of a bank or other financial institution withdraw their deposits simultaneously over concerns about the bank's solvency or stability. This mass withdrawal is typically driven by a fear that the bank will fail and depositors will lose their money.

Usage

The term is used to describe a specific financial crisis event at a single institution. It is a compound noun and is typically used in economic, financial, and historical contexts.

Examples

• During the Great Depression, numerous bank runs led to the collapse of thousands of financial institutions.
• The government guaranteed all deposits to prevent a potential bank run after the scandal was made public.
• A classic sign of a bank run is a long line of anxious customers outside the bank's doors.

Advanced Usage

• To experience/have/suffer a bank run: This phrasing describes the event from the bank's perspective.
  • The regional bank experienced a bank run after rumors spread about its investments.
• To trigger/precipitate/spark a bank run: This describes the cause of the event.
  • The misleading news article sparked a bank run that the bank struggled to contain.
• To stop/halt/forestall a bank run: This describes actions taken to end or prevent the event.
  • The central bank intervened with an emergency loan to halt the bank run.

Variants and Related Words

• Run on the bank: This is a synonymous phrase with identical meaning.
  • There was a run on the bank as panic spread through the community.
• Bank panic: A broader term that can describe a series of bank runs or a general loss of confidence in the banking system.

Synonyms

• Withdrawal panic
• Run on the bank

Related Concepts (Not Synonyms)

• Insolvency: The state of being unable to pay debts, which is the fear that causes a bank run.
• Liquidity crisis: A situation where a bank has assets but not enough cash (liquid assets) to meet immediate withdrawal demands, which is the direct result of a bank run.
• Deposit insurance: A system (e.g., the FDIC in the US) designed to prevent bank runs by guaranteeing depositors' funds.

Noun

1. the concerted action of depositors who try to withdraw their money from a bank because they think it will fail