Run on the banks? That is a joke. The average person is $20,000 in the hole. Are they all going to suddenly run down to the bank and pay it off? Maybe it’s $40,000. Whatever.
Actually, its already happening.
According to this NY Times author there is a bank run going on between banks, rather than individual depositors and banks.
"Soon afterward, however, a full-fledged financial panic began. Investors pulled hundreds of billions of dollars out of asset-backed commercial paper, a little-known but important market that has taken over a lot of the work banks used to do. This de facto bank run sent shock waves through the financial system."
The primary reason behind the emergency rate cuts and the TAF auctions, which seems to be a means to monetize mortgage debt, is to stave off a lack of lending between banks.
A bank in England recently underwent defacto nationalization in order to stop a bank run.
The real question is whether creditors will demand “pay up now”, or will realize that a reduced/interrupted payment plan is better than no payments at all. The latter works OK for them ... up to a point, where there’s enough debtors facing “pay now” that the creditor’s income stops.
But yes, kinda hard to have a run _on_ banks when most people don’t have anything there to speak of. I suppose the counterpoint is that there IS at least _something_ in most checking accounts, but if everyone pulls _that_ out at once, there still won’t be enough cash to satisfy the demanded withdraws. The average person may be $20-40K in the hole, but they still have an average of $2K in checking; there isn’t $200,000,000,000 cash sitting in ATMs and bank branches at any given moment.
Excellent!