Why was character George Bailey in the film It's a Wonderful Life right when he stated on the day of a bank run that depositors could not withdraw all their money from the bank?
by 
jzglasper
ANSWERS: 1
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Back in the days of that movie, just like now, banks had a required reserve ratio of cash (or central bank balance) to deposits. Traditionally that reserve ratio has been 20 per cent, more recently 10 per cent. The rest of depositors' money can go out on loans. Therefore, if all depositors wanted all their deposit money back all at once, in cash, the cash would not have been on hand. He continued to address his depositors that their money was really invested in each other, not in the vault, and that is indeed how banks and savings and loans (buiding and loans back then) operate. In the normal course of business those loans would be paid and withdrawals could be satisfied from onesy-twosey withdraws from the cash reserve. So long as there is no herd-mentality panic of everyone wanting their money out all at once the banking system works. If I remember that scene correctly, once he pulled the heart-strings about how he gave various people the chance they needed when they needed it, some of them became ashamed of themselves, put aside their panic, and decided they did not really need all the money right now after all.
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