Showing 1 - 10 of 154
Why do banks fail? We create a panel covering most commercial banks from 1865 through 2023 to study the history of failing banks in the United States. Failing banks are characterized by rising asset losses, deteriorating solvency, and an increasing reliance on expensive non-core funding....
Persistent link: https://www.econbiz.de/10015072849
Dun's Review began publishing monthly data on bankruptcies by branch of business during the 1890s. Those series evolved through many iterations. This essay reconstructs the series from 1895 to 1935 and discusses how it can be used for economic analysis
Persistent link: https://www.econbiz.de/10015072870
The failure of the Freedman's Savings Bank (FSB), one of the only Black-serving banks in the early post-bellum South, was an economic catastrophe and one of the great episodes of racial exploitation in post-Emancipation history. It was also most Black Americans' first experience of banking. Can...
Persistent link: https://www.econbiz.de/10014576605
We show that decentralized privately created money with unstable values can hinder the traded, more transaction-friction sensitive, sector of the economy. We do so in the context of the NationalBanking Act of 1864 in the United States that created a new federally-regulated, fully-backed currency...
Persistent link: https://www.econbiz.de/10013210088
During the Progressive Era (1900-29), economic growth was rapid but volatile. Boom and busts witnessed the formation and failure of tens of thousands of firms and thousands of banks. This essay uses new data and methods to identify causal links between failures of banks and bankruptcies of...
Persistent link: https://www.econbiz.de/10014528384
Which firms relied on commercial banks for credit and which firms did not at the onset of the Great Depression would seem to be an important question given the vast literature discussing banking distress in the United States during the 1930s. The question, however, has not been answered. This...
Persistent link: https://www.econbiz.de/10015072860
This paper identifies how bank branching benefited local economies during the Great Depression. Using archival data and narrative evidence, I show how Bank of America's branch network in 1930s California created an internal capital market to diversify away local liquidity shortfalls, allowing it...
Persistent link: https://www.econbiz.de/10014421204
This paper reviews the debt service ratio (DSR) as a theoretically well-grounded indicator of systemic risk. The DSR has the desirable feature that it fluctuates around a stable level which makes its early warning signals easy to understand and communicate. In contrast, current early warning...
Persistent link: https://www.econbiz.de/10015171707
We examine how financial crises redistribute risk, employing novel empirical methods and micro data from the largest financial crisis of the 20th century - the Great Depression. Using balance-sheet and systemic risk measures at the bank level, we build an econometric model with incidental...
Persistent link: https://www.econbiz.de/10014337771
We show theoretically that variable production costs lower systematic risk of firms' cash flows if capital and variable inputs are complementary in firms' production and input prices are pro-cyclical. In our dynamic model, this operating hedge effect is weaker for more profitable firms, giving...
Persistent link: https://www.econbiz.de/10013334458