In the event of a bank run, do people eventually get their money back? If not, why not?

729 views

I understand why banks cannot pay people back in the moment, but wouldn’t they still owe their depositors their money when they eventually DO get the money back presumably once the recession is over?

This is all assuming the bank does not permanently go bankrupt of course. I understand that some banks may just never recover and close their doors for good.

In: 46

20 Answers

Anonymous 0 Comments

Most of the other comments answer this pretty well, but to summarize– usually a run on the banks is very bad for that bank and will lead to their insolvency, meaning without the FDIC (As it was during the great depression), people would be unlikely to get their money back. FDIC was formed in the 1930s to insure the first $250,000 in your account in the case where your bank goes insolvent. So pre-1930s, you would likely not be getting your money back if there was a run on the bank. Post-1930s, you get paid out by the federal government but may still experience some losses if you have millions of dollars sitting in a savings or checking account.

You are viewing 1 out of 20 answers, click here to view all answers.