bank run

Syllable breakdown

Dictionary meaning

a sudden mass withdrawal of deposits by a large number of customers simultaneously, driven by fear that the bank is or will become insolvent; because banks operate on fractional reserve principles, holding only a fraction of deposits in liquid form, even a solvent institution can be forced into failure by a sufficiently large run; the threat of bank runs underpins the rationale for deposit insurance, central bank lender-of-last-resort facilities, and bank secrecy laws