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I will pay for the following article A Run on Bank. The work is to be 8 pages with three to five sources, with in-text citations and a reference page.
I will pay for the following article A Run on Bank. The work is to be 8 pages with three to five sources, with in-text citations and a reference page. The panic drives us to the nearest visible exit blindly like a reflex without a single thought that the seen exit shown up like an oasis is really an exit or just a mirage. Sometimes it is better not to take risks with your money. The panic or “they shout” of a bank run is as fast and as growing like a fire. This panic takes an epidemic look as the depositors start to feel the same with other banks too as an incoming shock as this kind of economic disaster is very frequently on the headlines. It’s like when my friend’s bank is under a bank run the next bank could be mine. So a bank run is efficiently capable of contaminating its misfortune to cause several bankruptcies at least if the total economic breakdown is managed to block. (Shin, 2009)
Banks have an origin of centuries. Once they were just little shops that were used to collect funds from people and use them to lend to the borrowers. This model, however, does not look much tough. Particularly in the case of depositors, they can freely withdraw their money with a small penalty where a bank cannot ever ask for the money to be returned whenever they need it. Thus, an error arises in this model. In order to nullify this error a bank generally keeps a cash reserve which the bank uses to lend money to the borrowers taking only a little part from the deposits. However, if the bank is completely healthy it can survive bankruptcy in the long run, but the sufferings of a bank run cannot be avoided when many people take their money back much than the cash reserved. So if a rough situation arises like this all depositors may not get their money back. The thing that makes the situation much worse is the first come first serve the policy of the withdrawal. As long the bank has their cash reserve depositors can take their money back, but beyond the cash reserve level, the bank is unable to return the money back. Hence, the insecure and desperate .depositors rush to the bank to take their money bank thinking this to be a bank run.
