In the early 1900s, the banking system wasn’t as stable as we might have hoped. Banks loan out money to borrowers, but are susceptible to a panic when a lot of customers want their money held in savings. A bank run occurs when a large number of a bank’s depositors attempt to withdraw their money simultaneously because they believe the bank will become insolvent. This happened frequently enough during the Great Depression that it put pressure on the President to create an insurance program.
It’s a Wonderful Life — Bank Run
With things headed in the wrong direction economically, George tries to head to the bank to convince the town members that they shouldn’t withdrawal all of their money from the bank at once. He quickly recognizes that a bank run would cripple the local economy and he does what he can to prevent it.
Ferris Bueller’s Day Off: Anyone?
I like to use this clip in my first lecture to show students how I don’t want class to end up? Ben Stein plays the economist that none of us want to be! He somehow takes a really exciting subject and makes it dreadfully boring.