In a speech delivered in June 2008, Timothy Geithner, then president of the Federal Reserve Bank of New York and later U.S. Treasury secretary, said: The structure of the financial system changed fundamentally during the boom.... [The] nonbank financial system grew to be very large.... [The] institutions in this parallel financial system [are] vulnerable to a classic type of run, but without the protections such as deposit insurance
that the banking system has in place to reduce such risks.
a. What did Geithner mean by the "nonbank financial system"?
b. What is a "classic type of run," and why were institutions in the nonbank financial system vulnerable to it?
c. Why would deposit insurance provide the banking system with protection against runs?