Run (also referred to in German)

The immediate, precipitous withdrawal of deposits from a single bank or from credit institutions as a whole, which can plunge the economy into a depressive maelstrom. The cause of a run is always a lack of confidence or corresponding expectations of customers with regard to an institution or the financial system in general (a panic reaction which occurs when a large number of depositors in a short time take their savings out of a bank, which they fear is financially unsound, or the financial system is about to collapse). – In principle, there is always a risk that the withdrawal of deposits from just one institution will lead to a run on all banks. But if customers withdraw their short-term deposits, the banks will no longer be able to service the loans they have already extended from new incoming money. Necessarily, their equity capital then shrinks. To avoid a collapse of the financial system, the central bank must now intervene, and in the end, as in the financial crisis that followed the subprime crisis, the state must intervene. – See bank collapse, Bear Stearns bankruptcy, stock market crash, crash, domino effect, five hundred euro bill, fear thesis, headline hysteria, herd behavior, IndyMac bankruptcy, Northern Rock debacle, stimulus threshold, repercussions, systemic, rush to exit, soul massage, sell off, sell out, foreshadow effects, balance of payments.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/