The impact of self-fulfilling prophecies on bank runs

Studienarbeit aus dem Jahr 2016 im Fachbereich BWL - Bank, Börse, Versicherung, School of Oriental and African Studies, University of London (CeFIMS), Sprache: Deutsch, Abstract: The study critically evaluates the role of banks' existence and examines in the context of theoretical models why banks exist. It describes the worldwide dreaded and at the same time exciting scenario of bank runs and their emergence and discusses the consequences. We will in this context discover what leads people to lose confidence and withdraw their money as well as what the bank run implications could mean for the society. There will also be an overview over the usual regulatory tools and mechanisms to prevent exactly these implications. The key of the analysis lies in the evaluation and prevention of possible moral hazard evolving from those interventions.