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Teeming and lading is a bookkeeping fraud also known as short banking, delayed accounting, and lapping. It involves the allocation of one customer 's payment to another customer's account to make the books balance, often to hide a shortfall or theft .
A 2007 run on Northern Rock, a British bank. The Diamond–Dybvig model is an influential model of bank runs and related financial crises.The model shows how banks' mix of illiquid assets (such as business or mortgage loans) and liquid liabilities (deposits which may be withdrawn at any time) may give rise to self-fulfilling panics among depositors.
An economic system, or economic order, [1] is a system of production, resource allocation and distribution of goods and services within a society. It includes the combination of the various institutions , agencies, entities, decision-making processes, and patterns of consumption that comprise the economic structure of a given community.
A deposit account is a bank account maintained by a financial institution in which a customer can deposit and withdraw money. Deposit accounts can be savings accounts , current accounts or any of several other types of accounts explained below.
A Schematic Representation of Deposit Return Scheme in Scandinavian Countries A container deposit refund facility in Melbourne Australia. A deposit-refund system (DRS), also known as deposit-return system, advance deposit fee or deposit-return scheme, is a surcharge on a product when purchased and a rebate when it is returned.
Indeed, Robert K. Merton, who coined the term self-fulfilling prophecy, mentioned bank runs as a prime example of the concept in his book Social Theory and Social Structure. [18] Mervyn King , governor of the Bank of England, once noted that it may not be rational to start a bank run, but it is rational to participate in one once it had started.
When commercial banks lend money today, they expand the amount of bank deposits in the economy. [20] The banking system can expand the money supply of a country far beyond the amount of reserve deposits created by the central bank, meaning contrary to popular belief, most money is not created by central banks.
An economic bubble (also called a speculative bubble or a financial bubble) is a period when current asset prices greatly exceed their intrinsic valuation, being the valuation that the underlying long-term fundamentals justify.