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A series of unexpected cash withdrawals caused by a sudden decline in depositor confidence or fear that the bank will be closed by the charteringagency, i.e. many depositors withdraw cash almost simultaneously. Since the cash reserve a bank keeps on hand is only a small fraction of its deposits, a large number of withdrawals in a short period of time can deplete available cash and force the bank to close and possibly go out of business.
Read also Euro debt crisis
Gamma The ratio of a change in the option delta to a small change in the price of the asset on which the option is written. Garmen-Kohlhagen option pricing model A widely used model for […]
Forty Australian economists issued a statement prior to the Greek national elections on January 25 claiming that the debt recovery program is unsustainable. They criticize the austerity program imposed by the Troika of the Europen […]
Idiosyncratic Risk Unsystematic risk or risk that is uncorrelated to the overall market risk. In other words, the risk that is firm specific and can be diversified through holding a portfolio of stocks. Immediate settlement […]
