If everyone who has money in a bank right now wanted to go and withdraw that money, would they all be able t?

when you deposit money in a bank or other financial institution, I have to assume on the surface that you should be able to physically go to the institution and withdraw any or all of that money at any time you want. However on a larger scale it is difficult to believe that any institution actually harnesses enough paper money to compensate if, for instance everyone who deposited money there wanted to go there and withdraw their money within a short period of time for some reason. For example many people deposit checks or have direct deposit, which does not equate to the paper money that you would anticipate when making a withdrawal. I am not sure if the banking system has seen any major change since the 30s, but a lack of physical funds by banks for all those who wanted to withdraw was in fact something that took place during that time, and was a leading cause of the great depression.





With that said, would any given financial institution actually be able to keep up with demand if for some reason several people wanted to withdraw a great deal of money from their bank accounts within a short period of time? Otherwise how can it be that some people might have so much money in their account, but be unable to physically withdraw it if they wanted to (due to the bank not having enough cash on hand)? Is that legal?|||i think my buck 56 is still safe|||No, because it is legal for banks to lend out more than they have. It should be illegal.|||No...they would stop that, its called a run on the banks. Its why banks were bailed out during the recession. Everyone pulled their money out because there wasnt enough cash for everyone to do so.|||I think they would close the banks and all assets will be frozen. Those in wall street will not be able to cover their margins. A crash will happen here first and then globally when panic will spread. I think that for a while some may be able but as soon as the bank notice they would close all windows. It happened in the US in the twenties. As a matter of fact, some trivia info "When women skirt hemlines get shorten then it is the beginning of a crash. When the crash happens skirts hemlines get longer". Go figure, I have no idea why.|||Capitalism would suffer (maybe could not even exist) without lending.





Your assumption, "You should be able to.. withdraw money at any time" is correct on the small scale.





However, deposits are used to create loans, which drive the economy.





In other words, we (but not you) agree that we would rather have cell phones, hospitals, cars, universities, wal-marts etc, rather than be a third-world country.