A bank run occurs when a large number of customers rush to withdraw their deposits from a bank, fearing its insolvency.
This collective action, driven by panic or loss of confidence, can deplete the bank’s cash reserves, leading to a crisis.
Bank runs can be triggered by rumors, financial instability, or a lack of trust in the banking system.
To prevent widespread panic, governments and central banks may intervene to stabilize the affected institutions and restore confidence in the financial system.