A bank run is
A)a large-scale, panicky withdrawal of deposits from a bank.
B)the transfer of funds from one bank to another.
C)a situation when a bank borrows from the Fed's discount window.
D)a situation in which a bank borrows at the Federal funds rate.

Question

Quizplus · Accepted Answer

A bank run is a situation where a large number of customers withdraw their money from a bank out of fear that the bank may fail or go bankrupt. This can be triggered by rumors, news reports, or other events that erode public confidence in the safety and soundness of the bank. The bank may not have enough cash on hand to meet all the withdrawal requests, leading to a further loss of confidence and potentially a vicious cycle of more withdrawals and bank failure.

A Bank Run Is