National Report On Banking Crises
This paper has some pretty interesting conclusions on banking- I think some of you history buffs might enjoy it although it doesn’t replace true classics of financial history like Devil Take The Hindmost.
Click Here To Read A Research Summary On Banking Crisis
Article Introduction (Via NBER)
The current global financial crisis grew out of banking losses in the United States related to subprime lending. How well do economists understand the origins of such crises and how they spread? Was this crisis something new or a replay of familiar historical phenomena? Will policy interventions be able to mitigate its costs? The history of banking crises provides informative perspectives on these and other important questions.
Additional Article Excerps (Via NBER)
Crises are not all the same!
When considering the history of banking crises, it is useful to distinguish between two phenomena associated with banking system distress: exogenous shocks that produce insolvency, and pressures on banks that arise from rapid withdrawals of debt or failures to rollover debt during “panics.” These two contributors to distress often do not coincide. For example, in the rural United States during the 1920s, large declines in agricultural prices cause many banks to fail, often with high losses to depositors, but those failures were not associated with systemic panics.2 In 1907, the opposite pattern was visible. The United States experienced a systemic panic, originating in New York, which was precipitated by small aggregate shocks but had large short-term systemic effects associated with widespread withdrawals of deposits. Although some banks failed in 1907, failures and depositor losses were not much higher than in normal times. That crisis was resolved only after banks had uncertainty about the incidence of the shock had been resolved.
