Bank run is a situation, in which all savers, above all also those, which need the money put on only later for consumption, run from panic propelled to the bank, in order to take their inserts off (DEPOSITs).

Given that all other savers run to the bank, it is to be optimally also run it for each saver. It represents thus an Nash equilibrium. However this situation is inefficient, it can to the collapse of the bank and the loss of a majority of the inserts lead.

Trips for bank a run can be the profit break-down of the bank, collapses of other banks as well as bad economic prospects. Bank a run is possible also without concrete cause (Sunspot phenomenon).

In order to prevent bank a run, can the bank announce starting from a certain check threshold the payments to suspend (suspension OF Convertibility). The check threshold, but that the bank no further disbursements makes, contractually specified and publicly admits made.

Examples of bank a run are the bank crisis 1929-31 or the crisis in Argentina.

Around bank a run to prevent is meaningful an insert security system. The position of an insert insurer corresponds to a quiet owner position in an option to sell on active. The practice price is the customer commitment. An insert safety device can be organized nationally and privately. A private institution must have sufficient collateral, while the state refinances itself by collection of taxes.

Articles in category "Bank run"

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