During financial panics, individuals try to withdraw their money from banks and so may cause the bank to go broke.

Question

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During financial panics, many individuals simultaneously attempt to withdraw their money from banks due to fear of losing their savings. This can lead to a liquidity crisis for the bank, as it may not have enough liquid assets to cover all withdrawals, potentially causing the bank to fail.

During Financial Panics, Individuals Try to Withdraw Their Money from Banks