But unlike a life insurance policyholder, a depositor can withdraw all or most of her funds if she has any fear – even an ill-founded fear – that the bank may be in trouble. Indeed, depositors have a rational incentive to act quickly, since the first to withdraw will have the best chance of getting all their money back.
In fact, you yourself can only grasp the speech you are listening to in this very moment because of your knowledge of this field. At the Bundesbank, we are ourselves engaged in economic education. After all, monetary policy reasoning can only be successfully communicated if the general public have a basic grasp of terms such as inflation or interest.