Social Sciences and History / Unit 14 SSH 1331 short lesson, about 20 seconds
Runs, Insurance, Supervision, Last Resort
Captions available
The idea
A bank run is depositors racing to withdraw on rumors of negative net worth. Three defenses: deposit insurance, the FDIC guaranteeing deposits to two hundred fifty thousand dollars; bank supervision by four agencies; and the central bank as lender of last resort.
In practice
Many banks failing together can deepen a recession.
Where people slip
The insurance limit is a current statutory figure.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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