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How can a run on deposits lead to problems in banking?
#1 · 18/08/2026, 11:47 am
Why is a run on deposits such a terrible situation for a bank? In case when there is a mass desire by clients to withdraw their money, there may not be enough cash available with the bank for its own requirements. Panic will spread very quickly among customers in case of a run on deposits. In this case, even a bank rich in assets can be forced into making a mistake.
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