What occurs during a bank run?

A bank run occurs when a large number of customers withdraw their deposits simultaneously due to concerns about the bank's solvency. This sudden demand for cash can overwhelm the bank, as it typically doesn't hold enough liquid assets to cover all deposits. As withdrawals escalate, the bank may become unable to meet its obligations, leading to potential insolvency and further panic among depositors. Bank runs can trigger broader financial instability and may prompt government intervention or emergency measures.