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A run on a bank occurs when a large number of customers withdraw their deposits simultaneously due to concerns about the bank's solvency or financial stability. This can lead to a liquidity crisis, as banks typically do not keep enough cash on hand to cover all deposits, given that they use deposited funds for loans and investments. If the run escalates, it can result in the bank's failure and potentially impact the broader financial system. Bank runs are often fueled by panic and fear rather than actual insolvency.

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