Bank Run And The Great Depression Essay

In November 1930, there was economic stagnation that led to the great depression. [1] Many non-federal reserve banks had fewer cash to draw from during emergencies such as a financial crisis. Bank Run is when bank deposits are threatened, investor confidence is low due to poor bank performance and because of this there were will be a mass withdrawal of bank funds, rendering the bank insolvent.[2] The feedback loop that is chosen, is entitled “Bank Panic”, which pertains to bank running.[3] Positive direction where (+) and (-) were negative, the loop demonstrates that as fear of not being able to withdraw funds increases (+), investor confidence decreases (-) which creates greater withdrawal. Greater withdrawal damages bank integrity, this leads