A bank-run occurs when a large number of depositors queue outside a bank, and ask for their money back. It is common to call the depositors of the bank, its customers. The bank doesn’t make any money out of you.
The bank makes its money by lending. Theoretically, the risk of a bank-run can only be eliminated completely if the maturity of the deposits are matched 100% to maturity of loans made out by the bank. The Government provides Liquidity to the Bank: If the bank-run is triggered just because of a rumour, and the bank is fundamentally healthy, then the Government should provide a bridge – loan to the bank to tide over the crisis.
What is a Bank Run?
If you have a home mortgage with Bank of America, or Countrywide, which was purchased by Bank of America, you should be aware of the Bank of America loan modification program.
Foreclosure is not what your bank would like to see happen.