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Bank Runs: Trouble for Fractional Reserve Banks
What happens if depositors want to withdraw an unusually large (and unexpected by the bank) on a particular day?
As long the bank has enough reserves on-hand, nothing. The bank pays the depositors.
But, if the amount depositors want to withdraw exceeds the amount the bank has on-hand in reserves, then the bank cannot meet all the demands of the depositors. The bank has failed. It is now bankrupt and closed.
When depositors begin demanding an unusually large amount of withdrawals, it is called a bank run. In the old days, depositors would literally run to the bank to withdraw their money before the bank collapsed.