respond to discussion

Depository institutions are some of the most regulated firms in the financial industry for good reason. Their fallure can spell disaster for the entire system. Depository institutions come with a few risks not found in other institutions. When people place their money in the bank, most of them don't think about what happens to the cash, or they assume it sits in the vault. When in reality, that money is loaned out, and a bank that is operating efficiently, will keep only the bare minimum, and even sometimes less, on hand to meet regulatory requirements and make sure individuals have access to a reasonable amount of money at any given time. However, while the bank loans their money out, it opens them up to a risk unseen by many other institutions. If enough people are to try and withdraw from a bank at arny given time, they may run out of money to cover those withdrawals. This can lead to lock of faith and frankly panic amongst those who hold their money there. This is a self feeding cycle of negetivity, the more people trying to get money out, the harder it becomes, and the more people get scared and try to take their hard eamed money out. With that said, in times of unrest, our systems do have protections in place, such as the ability to borrow from other commercial baniks at a reasonably rate, and even if need be, to borrow from the Federal Government. No system is perfect, but I think our banking system as a whole does a good job of creating strong, resilient depository institutions