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Explanation:
Digital platforms and social media played a crucial role in amplifying depositor panic during the 2023 bank collapses. Information about potential instability spread quickly, prompting depositors to withdraw funds en masse within hours, a phenomenon sometimes referred to as a "digital bank run."
A is incorrect. While timely communication is critical during banking crises, the speed of the collapses in 2023 was not primarily due to delays in regulatory communications but rather to the rapid spread of information and loss of confidence.
B is incorrect. In modern banking, reliance on physical cash transactions has decreased significantly. The rapid withdrawal of funds was facilitated by digital banking platforms, not physical cash.
D is incorrect. On the contrary, widespread access to online banking platforms made it easier for depositors to move funds quickly, contributing to the speed of the bank runs.
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Q.6300 The speed at which depositors withdrew funds from certain US banks in 2023 contributed significantly to their rapid collapse. What factor significantly amplified the speed of these bank runs?
A
Delays in regulatory communications
B
Increased reliance on physical cash transactions.
C
The rapid dissemination of information via digital channels.
D
Temporary limited access to online banking platforms.