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Relationship and Transaction Lending in a Crisis
Bolton, Patrick - 2013
We study how relationship lending and transaction lending vary over the business cycle. We develop a model in which relationship banks gather information on their borrowers, which allows them to provide loans for profitable firms during a crisis. Due to the services they provide, operating costs...
Persistent link: https://www.econbiz.de/10013075424
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Bank Failures and Output During the Great Depression
Miron, Jeffrey A. - 2013
In response to the Financial Crisis of 2008, macroeconomic policymakers employed a range of tools designed to prevent failures of large, complex financial institutions ("banks"). The Treasury and the Fed justified these actions by arguing that bank failures exacerbate output declines, rather...
Persistent link: https://www.econbiz.de/10013076188
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Financial Crises and Economic Activity
Cecchetti, Stephen G. - 2010
We study the output costs of 40 systemic banking crises since 1980. Most, but not all, crises in our sample coincide … of past banking crises were higher when they were accompanied by a currency crisis or when growth was low at the onset of … a tendency for systemic banking crises to have lasting negative output effects …
Persistent link: https://www.econbiz.de/10013150838
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Bank Distress During the Great Depression : The Illiquidity-Insolvency Debate Revisited
Richardson, Gary - 2007
During the contraction from 1929 through 1933, the Federal Reserve System tracked changes in the status of all banks operating in the United States and determined the cause of each bank suspension. This essay analyzes chronological patterns in aggregate series constructed from that data. The...
Persistent link: https://www.econbiz.de/10012778170
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Systemic Risk and the Great Depression
Das, Sanjiv Ranjan - 2018
We employ a unique hand-collected dataset and a novel methodology to examine systemic risk before and after the largest U.S. banking crisis of the 20th century. Our systemic risk measure captures both the credit risk of an individual bank as well as a bank's position in the network. We construct...
Persistent link: https://www.econbiz.de/10012906269
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Bank Supervision, Regulation, and Instability During the Great Depression
Mitchener, Kris James - 2010
Even after controlling for local economic conditions, differences in state bank supervision and regulation contribute toward explaining the large variation in state bank suspension rates across U.S. counties during the Great Depression. More stringent capital requirements lowered suspension...
Persistent link: https://www.econbiz.de/10012762636
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Financial Fragility and the Great Depression
Cooper, Russell - 2010
We analyze a financial collapse, such as the one which occurred during the Great Depression, from the perspective of a monetary model with multiple equilibria. The economy we consider contains financial fragility due to increasing returns to scale in the intermediation process. Intermediaries...
Persistent link: https://www.econbiz.de/10012763576
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Financial Intermediation and the Great Depression : A Multiple Equilibrium Interpretation
Cooper, Russell - 2010
This paper explores the behavior of the U.S. economy during the interwar period from the perspective of a model in which the existence of non-convexities in the intermediation process gives rise to a multiplicity of equilibria. The resulting indeterminancy is resolved through a sunspot process...
Persistent link: https://www.econbiz.de/10012763745
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Relationship Lending and the Great Depression
Cohen, Jon S. - 2016
The collapse of long-term lending relationships amplified the Great Depression. We demonstrate this by developing a new measure of lending relationships that can be calculated from widely available data at any level of aggregation. Our approach exploits differences in the responsiveness of loan...
Persistent link: https://www.econbiz.de/10012978091
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Contagion and Bank Failures During the Great Depression : The June 1932 Chicago Banking Panic
Calomiris, Charles W.; Mason, Joseph R. - 2021
Studies of pre-Depression banking argue that banking panics resulted from depositor confusion about the incidence of shocks, and that interbank cooperation avoided unwarranted failures. This paper uses individual bank data to address the question of whether solvent Chicago banks failed during...
Persistent link: https://www.econbiz.de/10013221927