What event occurs during a bank run?

During a bank run, customers withdraw deposits simultaneously, creating a situation where the demand for cash exceeds the bank's liquidity. This phenomenon often occurs when depositors lose confidence in the bank's ability to safeguard their money, typically triggered by rumors of financial instability or insolvency. As more customers rush to withdraw their funds, the bank may struggle to fulfill all withdrawal requests, leading to potential failure if the run continues unchecked.

This massive simultaneous withdrawal reflects the panic and lack of trust in the financial institution, emphasizing the importance of a bank's reserve ratio and its ability to manage its assets and liabilities effectively. While the other choices describe actions that banks might take during periods of normal operations, they do not capture the nature of a bank run, which is specifically characterized by the rapid and collective withdrawal of funds by depositors.