A bank run is when banks run the printing presses and make more paper money. t or f

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19 January, 02:55

A bank run is when banks run the printing presses and make more paper money. t or f

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Adriana Esparza · Answer 1

No! Its false

Will · Answer 2

The statement is false.

Explanation:

A bank run refers to the widespread and simultaneous efforts of depositors to withdraw their bank deposits. The need for a deposit causes a liquidity shortage for the bank and, in the worst case scenario, could break the bank, which could even result in the loss of unused deposits. Deposits may be linked to a broader banking crisis.

To prevent the escaping of deposits, bank deposits are often partly or even fully guaranteed by the government or by a separate fund controlled by the authorities. Banks are also subject to solvency requirements, which should curb the potential for panic among depositors. The reasons for the deposit failure vary, but generally there is evidence of an increase in the deposit's risk concentration.