You don't need to be uneducated, insane, or an idiot to withdraw all of your money when you suspect that your bank is going to fail. It can be an individually rational move even if you merely suspect that other customers suspect that your bank is going to fail.
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This, again, is just a question of education - create sane citizens not idiots.
You don't need to be uneducated, insane, or an idiot to withdraw all of your money when you suspect that your bank is going to fail. It can be an individually rational move even if you merely suspect that other customers suspect that your bank is going to fail.