What is a bank run? Why banks can't pay everyone at once
By SendPay Business · · 2 min read
A bank run is when many customers try to take their money out of a bank at the same time, usually because they fear it is in trouble. Because banks lend out most of the money deposited with them, even a healthy bank can't pay everyone back at once.
Real examples
- Northern Rock, 2007: queues formed outside UK branches after news it had asked the Bank of England for emergency help.
- Silicon Valley Bank, 2023: customers tried to withdraw around $42 billion in a single day, and the bank was closed the next morning.
Why they spread so fast now
With mobile banking, customers can move money in seconds, and worries can spread on social media within hours. That made the Silicon Valley Bank run far quicker than older ones.
How customers are protected
In the UK, eligible deposits at banks and building societies are covered by the Financial Services Compensation Scheme (FSCS) up to a set limit per person, per bank. E-money firms work differently: instead of FSCS cover, they must safeguard customer money, keeping it separate from their own.
Where SendPay fits
SendPay platforms include accounts, cards and transfers under your own brand, powered by licensed partners. SendPay tells you in writing which licences apply to your platform before you pay.
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Build my platform →Questions people ask
Could a bank survive a run?
Work out its liquidity coverage and loan-to-deposit ratios.
Bank liquidity calculator →How much of my savings is protected?
See how much is within the FDIC, EU or FSCS limit.
Deposit insurance calculator →Read next
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.