“When bank customers worry that the bank will go bankrupt, bank runs will occur. Customers are eager to take their money to the bank as soon as possible to avoid losses. Federal deposit insurance has ended the bank run. “Simply, the bank runs, Also known as a bank run, a long-term fixed fee for a financial institution’s customers when they withdraw their deposits at the same time or in a short period of time, for fear of the bank’s solvency or the bank’s ability to meet. In essence, bank customers are afraid of losing money and do not trust the sustainability of banking business leading to large-scale divestment. In order to better understand what happened during the bank run and its impact, we must first understand how banking institutions and customer deposits work. When you deposit money into a bank, you usually deposit the deposit into a demand deposit account, such as a checking account. With a current account, you have the right to withdraw your funds from your account whenever you need it. However, in some reserve banking systems, banks do not need to deposit all deposits as cash in demand deposit accounts in the vault. In fact, most banking institutions retain only a small portion of their assets at all times. Instead, they take the money and sell it as a loan, or otherwise invest it in other interest-bearing assets. Although the law stipulates the minimum level of bank deposits (called reserve requirements), these requirements are usually very low compared to total deposits, usually within 10%. Therefore, at any given time, the bank can only pay a small portion of its customer deposits as needed. The demand deposit system works well unless a large population requires that funds be taken out of the bank and the reserves are exceeded. The risk of such an event is usually small unless there is a reason for the bank customer to believe that the funds in the bank are no longer safe.