This is a problem of not having enough reserves, and not quite of lending deposits. Banks encourage people to put their money in the bank in exchange for deposi

This is a problem of not having enough reserves, and not quite of lending deposits. Banks encourage people to put their money in the bank in exchange for deposits so that they have these reserves. It’s like the article says: banks give out deposits in exchange for Government Cash, or for Valuable Long Term Promises. A run can kill a bank if they read the market wrong and can’t generate enough government cash to redeem the deposits.