History 2186A/B Lecture 8: lecture 8: bank runs and crashes
8 Apr 2018
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Bank runs, occurs when depositors to a bank in large numbers turn up and request for their accounts to be. In most jurisdictions then it is treated as the bank gave up. Fear of bank collapse can create bank collapse. It collapsed but no one knows why: crashes, can bring down an entire economic system, number of reoccurring problems due to the crashes, not enough capital to pay for war of independence. For centuries, transactions were done with hard money - coins - specie. Imagine this is entirely new so for your entire life they have been paid in hard money, silver coins. Imagine someone says im going to give you paper, no more coins: people do(cid:374)"t u(cid:374)de(cid:396)sta(cid:374)d it a(cid:374)d a(cid:396)e s(cid:272)a(cid:396)ed the(cid:396)e is (cid:374)o (cid:448)alue, 1700"s. If you want to buy the land, cant buy with paper money. Less popular amongst depositors: trust companies and life insurance become incredibly popular, become bubbles.
