As the government moved to backstop depositors affected by the collapse of Silicon Valley Bank and Signature Bank, surviving banks will end up footing the costs, says Laurie Stewart at Sound Community Bank in Seattle.
Bank runs become a problem because banks don’t actually have a lot of money in the bank. Your deposit, to a bank, is a loan — and most of that money gets lent out again.
A bank run occurs when customers run down to the bank and demand their money back. So, why can't the bank just return the cash? Sr. Producer Paddy Hirsch explains using a human heart analogy.