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A Classic Run on the Bank Problem
On March 8th, 2023, the bank's holding company announced it was conducting a capital raise. Investors and depositors reacted by initiating withdrawals of $42 billion in deposits. The precipitous deposit withdrawal has caused the bank to be incapable of paying its obligations as they come do. As of the close of business on March 9th, the bank had a negative cash balance of approximately $958 million.