Teaching Bank Runs Through Films

Abstract

The author advocates the use of films to supplement textbook treatments of bank runs and panics in money and banking or general banking classes. Modern students, particularly those in developed countries, tend to be unfamiliar with potential fragilities of financial systems such as a lack of deposit insurance or other safety net mechanisms. Films provide a dramatic example of the panic and uncertainty experienced by depositors and banks during bank runs. Students learn the value of deposit insurance and the types of informational asymmetries safety net mechanisms overcome. The author provides examples of assignments given in the past and possible extensions.