Bank Run

A bank run happens when a bunch of people rush to withdraw their money from a bank all at once because they’re worried the bank might fail. It’s like when everyone gets freaked out and decides to pull their cash from the same ATM simultaneously. 

For example, if a local bank gets some bad news or rumors start spreading that it’s in trouble, people might panic and try to take out all their savings at the same time. This rush can create a real problem because banks don’t keep all their money in the reserves, they lend a lot of it out. So, if too many people demand their cash at once, the bank might not have enough to go around, and that can lead to even bigger financial issues.

A bank run can really shake up the financial system, causing problems not just for the bank but potentially for other banks and the economy as a whole. It’s a big reason why banks and regulators work hard to keep things stable and ensure that people trust the banking system.