Banks can contractually anticipate runs through a 'notice of withdrawal' clause (used by US trust companies and savings banks before FDIC) requiring 60-90 days notice; depositors accept it because they would want the clause invoked on others rather than be last in line, and the delay lets a prudently managed bank sell liquid assets to meet redemptions without dumping unsaleable assets at fire-sale losses.

factualpending

Speaker

Larry White

Evidence Quote

it's in your interest to have that clause in all the deposit accounts if it really is a problem and the 90 days gives the bank time... to sell off some of its more liquid assets

Source

Larry White on Hayek and Money 02/01/2010EconTalk
Created: 6/17/2026, 10:31:20 AM

My Notes

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