Bank Runs Just Aren’t What They Used to Be

Everywhere you look these days, people are talking about bank runs. The collapse of crypto exchange FTX; the flood of assets out of Credit Suisse Group AG; the limits on fund redemptions by Blackstone Real Estate Income Trust (BREIT) – they’ve all been characterized as “bank runs” by various commentators. Google searches for the term “run on the bank” are hitting levels not seen since the global financial crisis in 2008.

Thankfully, these aren’t your grandad’s bank runs – or even your aunt’s. They are much more benign than the Panic of 1857, for example, when, according to one account, “Wall Street literally was filled with depositors hurrying to withdraw their funds.” Banks in New York City lost about half their deposits in that episode. A series of cascading bank runs 75 years later contributed to the Great Depression and the failure of about 9,000 institutions. In contrast, this year’s events aren’t really bank runs at all.