Snap Judgment: When to Trust Your Instincts, When to Ignore Them, and How to Avoid Making Big Mistakes with Your Money

36. Risky Business: Bank Runs

In September of 2007, investors trying to access their accounts online at Northern Rock, a U.K. building society, found the website kept crashing. It was impossible to withdraw funds electronically. Investors were already anxious about the solvency of the bank because of its exposure to U.S. subprime mortgage-backed securities. Unable to withdraw funds any other way, customers began lining up outside Northern Rock branches at 3:00 a.m., waiting for the bank to open. Once they got inside, many refused to leave until they got their money. A couple in Cheltenham barricaded themselves and the local branch manager in her office until she would transfer their £1 million online account out of the bank. Eventually, police ...