Harvard Economist Fears Starting "Bank Run" On BoA By Withdrawing $1 Million

Former Harvard Professor of Economics Terry Burnham fears starting a “run” on Bank of America after he made public his decision to withdraw $1 million dollars from his checking account as a protest against Janet Yellen beginning her term as Federal Reserve head this month.

In an article for PBS entitled Is your money safe at the bank? An economist says ‘no’ and withdraws his, Burnham, an ardent critic of the Fed, writes, “Why do I risk starting a run on Bank of America by withdrawing my money and presuming that many fellow depositors will read this and rush to withdraw too? Because they pay me zero interest. Thus, even an infinitesimal chance Bank of America will not repay me in full, whenever I ask, switches the cost-benefit conclusion from stay to flee.”

Burnham explains that Bank of America may be “unwilling or unable” to return his money should one of a number of different circumstances arise, such as depositors demanding their money back en masse, or if the investments on which 90% of depositors’ money Bank of America has loaned out to cover go bust.

After everything we have learned about BoA I’m not sure why anyone would still want to put their money into that bank or any bank for that matter.  To me a bank holds your money for you and when you want it, you should get it, it is after all your money.  That is what they are suppose to do.  Instead they gamble it away, make up fake numbers, lose it, speculate, inflate, penalize, and draw all kinds of interest on your side money and it has become this huge deal now where if they go they will take all of us with them.