Explore BrainMass

Explore BrainMass

    This post addresses bank panic and related issues.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Does the fact that your bank keeps only a fraction of your account balance in reserve make you uncomfortable? Why don't people rush to the bank and retrieve their money? How do banks prevent panics from occurring?

    © BrainMass Inc. brainmass.com June 4, 2020, 2:54 am ad1c9bdddf
    https://brainmass.com/business/auditing/this-post-addresses-bank-panic-and-related-issues-486337

    Solution Preview

    No, it does not make me uncomfortable that the bank only keeps a fraction of my money in reserve. Account depositors are insured by the FDIC up to at least $200,000, and in most cases, beyond that, if a crisis were to ensue. Because my deposit is ensured, I am completely content with the bank keeping only a portion on reserve, and the reserve that they keep is what is required by law. Even if I needed to access 100% of my cash, ...

    Solution Summary

    This solution discusses bank panic and if the fact that your bank keeps only a fraction of your account balance in reserve should make you uncomfortable. Also discussed is how banks prevent panics from occurring and why people don't rush to the bank and retrieve their money.

    $2.19

    ADVERTISEMENT