A bank run is best described as:

• A. The bank's daily protocol of balancing cash reserves
• B. A sudden rush by depositors to withdraw funds due to fear of bank insolvency
• C. An official banking audit
• D. A government bailout of a failing bank

Answer: (B)

A bank run happens when many people lose confidence in a bank and rush to withdraw their money. This sudden impulse to take out deposits creates a liquidity crisis, because banks don’t hold all deposits in cash and can’t instantly satisfy a flood of withdrawals. If enough customers withdraw at once, the bank may run out of cash and appear insolvent, which can cause more people to run to withdraw, feeding the cycle.

That’s why the best description is a sudden rush by depositors to withdraw funds due to fear of bank insolvency. The other options describe routine or unrelated actions: normal cash balancing is a routine process, an official audit is a review, and a government bailout is a rescue step, not the event of a run itself.