This paper finds that the implementation of the Glass Steagall Act may have increased the cost for corporations of raising external funds for investment spending. Specifically, it detects significant differences in the way financial institutions (commercial banks, trust companies, and insurance...

This paper presents evidence suggesting that the relationship that existed between the partnership of J.P. Morgan and its client firms partially resolved the latter's external financing problems by diminishing the principal-agent and asymmetric information problems. I estimate and compare...

On September 29, 2008, the House of Representatives voted to reject HR 3997 (known as the original $700 Billion Bailout Bill). On October 3, the House reversed course and voted to approve the Emergency Economic Stabilization Act of 2008 (EESA). This paper applies a political voting model to...

This paper quantifies the short-term and long-term impact of bank supervision (measured using CAMEL composite and component ratings) on different categories of loan growth: (a) commercial and industrial loans, b) consumer loans, and (c) real estate loans. For each of these categories, we perform...

This paper provides empirical evidence documenting the existence of a credit channel during the pre-Depression era using a newly constructed, state-level quarterly time series from 1900Q1 through 1931Q2 for the 48 contiguous states. It also investigates the source and size of the credit channel,...

This paper examines how the U.S. financial crisis of 1893 affected state output growth between 1900 and 1930. The results indicate that a 1% increase in bank instability reduces output growth by about 5%. A comparison of the cases of Nebraska, with one of the highest bank failure rates, and West...

This paper quantifies the short-term and long-term impact of bank supervision (measured using CAMEL composite and component ratings) on different categories of loan growth: (a) commercial and industrial loans, (b) consumer loans, and (c) real estate loans. For each of these categories, we...

The American corporate financing system, unlike that of most other countries, has not been organized around a set of "universal banks" that perform a variety of functions for their clients. Indeed, the distinguishing feature of American financial history is the number and variety of financial...