"Bank Runs: Understanding the Liquidity Crisis and the Role of Deposit Insurance"

Join us as we explore the intricate dynamics of bank runs and the essential role of liquidity in the banking system. Discover how traditional deposit contracts can offer superior risk-sharing solutions, yet remain vulnerable during economic uncertainty. Our expert guests, Douglas W. Diamond and Philip H. Dybvig, delve into the mechanisms that lead to bank runs and how government-provided deposit insurance acts as a stabilizing force—much like a parachute for paratroopers. Tune in to understand this critical aspect of our financial landscape!