Editing Bank run (section)

=== Individual banks ===
Some prevention techniques apply to individual banks, independently of the rest of the economy.
* Banks often project an appearance of stability, with solid architecture and conservative dress.<ref name="planet_money">{{cite news|agency=NPR|url=https://www.npr.org/templates/transcript/transcript.php?storyId=154719542|title=Three Ways To Stop A Bank Run|date=2012-06-11|author=Zoe Chase}}</ref>
* A bank may try to hide information that might spark a run.<!-- ref name=Diamond2007 --> For example, in the days before deposit insurance, it made sense for a bank to have a large lobby and fast service, to prevent the formation of a line of depositors extending out into the street which might cause passers-by to infer a bank run.<ref name=Diamond2007/>
* A bank may try to slow down the bank run by artificially slowing the process. One technique is to get a large number of friends and relatives of bank employees to stand in line and make many small, slow transactions.<ref name="planet_money" />
* Scheduling prominent deliveries of cash can convince participants in a bank run that there is no need to withdraw deposits hastily.<ref name="planet_money" />
* Banks can encourage customers to make [[term deposit]]s that cannot be withdrawn on demand. If term deposits form a high enough percentage of a bank's liabilities, its vulnerability to bank runs will be reduced considerably. The drawback is that banks have to pay a higher interest rate on term deposits.
* A bank can temporarily suspend withdrawals to stop a run; this is called ''suspension of convertibility''. In many cases, the threat of suspension prevents the run, which means the threat need not be carried out.<ref name=Diamond2007/>
* Emergency acquisition of a vulnerable bank by another institution with stronger capital reserves. This technique is commonly used by the U.S. [[Federal Deposit Insurance Corporation]] to dispose of insolvent banks, rather than paying depositors directly from its own funds.<ref name="anatomy">{{cite news|url=https://www.npr.org/templates/story/story.php?storyId=102384657|date=2009-03-26|title=Anatomy Of A Bank Takeover|agency=NPR|author=Chana Joffe-Walt}}</ref>
* If there is no immediate prospective buyer for a failing institution, a regulator or deposit insurer may set up a [[bridge bank]] which operates temporarily until the business can be liquidated or sold.
* To clean up after a bank failure, the government may set up a "[[bad bank]]", which is a new government-run asset management corporation that buys individual nonperforming assets from one or more private banks, reducing the proportion of junk bonds in their asset pools, and then acts as the creditor in the insolvency cases that follow. This, however, creates a [[moral hazard]] problem, essentially subsidizing bankruptcy: temporarily underperforming debtors can be forced to file for bankruptcy in order to make them eligible to be sold to the bad bank.