A bank run is the process of a bank’s insolvency, where it can no longer repay depositors. Today, however, banks are able to avoid this obligation through the credit provided by central banks. Even though there is a legal requirement for reserve deposits, this practice has become virtually obsolete. Instead of holding depositors’ money, banks respond to withdrawal demands by borrowing from the central bank. Fractional reserve banking is a system in which banks hold only a small portion of deposits in reserve while lending out the remainder. This practice has historically led to banks taking excessive risks and facing…