Pankakäendus

Pankakäendus, also known as "bank run" in English, is a situation where a large number of depositors withdraw their funds from a bank simultaneously, often due to a perceived threat to the bank's solvency. This can occur for various reasons, including economic uncertainty, rumors of financial distress, or changes in banking regulations. When a bank experiences a pankakäendus, it can lead to a significant decrease in its liquidity, potentially causing it to become insolvent if the outflows exceed its reserves.

The term "pankakäendus" is derived from the Estonian words "pank," meaning bank, and "käendus," meaning run. This phenomenon is not unique to Estonia and has been observed in various countries and financial systems throughout history. For example, during the Great Depression in the 1930s, many banks around the world faced pankakäendus, leading to widespread financial instability.

To mitigate the risks associated with pankakäendus, central banks and regulatory authorities often implement measures such as deposit insurance, capital requirements, and liquidity ratios. These measures aim to ensure that banks have sufficient capital and liquidity to withstand potential runs and maintain stability in the financial system. Additionally, banks may employ strategies like increasing reserve requirements or offering incentives to depositors to encourage them to maintain their deposits.

In summary, pankakäendus refers to a situation where a large number of depositors withdraw their funds from a bank simultaneously, often due to concerns about the bank's solvency. This phenomenon can lead to financial instability if not properly managed. To address this risk, central banks and regulatory authorities implement various measures to ensure the stability of the banking system.