Efforts in the United States to promote bank liquidity through reserve requirements, a minimum ratio of liquid assets relative to liabilities, extend at least as far back as the aftermath of the Panic of 1837. These requirements were quite important during the National Banking Era. Nevertheless,...

In August 1763, northern Europe experienced a financial crisis with numerous parallels to the 2008 Lehman Brothers episode. The 1763 crisis was sparked by the failure of a major provider of acceptance loans, a form of securitized credit resembling modern asset-backed commercial paper. The...

In August 1763, northern Europe experienced a financial crisis with numerous parallels to the 2008 Lehman Brothers episode. The 1763 crisis was sparked by the failure of a major provider of acceptance loans, a form of securitized credit resembling modern asset-backed commercial paper. The...

In August 1763, northern Europe experienced a financial crisis with numerous parallels to the 2008 Lehman Brothers episode. The 1763 crisis was sparked by the failure of a major provider of acceptance loans, a form of securitized credit resembling modern asset-backed commercial paper. The...

This paper summarizes and compares the events associated with two financial crises separated by 100 years, occurring in 1907 and 2007-2009. The dynamics of both crises have much in common. The commonalities inform and enrich the theories and research on the dynamics of financial crises. And they...

This article examines how the U.S. banking system responded to the founding of the Federal Reserve System (Fed) in 1914. The Fed was established to bring an end to the frequent crises that plagued the U.S. banking system, which reform proponents attributed to the nation’s...

As a result of legal restrictions on branch banking, an extensive interbank system developed in the United States during the nineteenth century to facilitate interregional payments and flows of liquidity and credit. Vast sums moved through the interbank system to meet seasonal and other demands,...

Economists have long debated the relationship of bank credit to the business cycle. The attribution of economic cycles to the "inherent instability" of fractional-reserve banking has been advanced not only by Austrian scholars in the tradition of Murray Rothbard, but also by a number of...

This paper examines the impact of the Federal Reserve’s founding on seasonal pressures and contagion risk in the interbank system. Deposit flows among classes of banks were highly seasonal before 1914; amplitude and timing varied regionally. Panics interrupted normal flows as banks throughout...

We find evidence that the runs on banks and trust companies in the Panic of 1907 were linked to the Bank of England's contractionary monetary policy actions taken in 1906 and 1907 through the medium of copper prices. Results from our VAR models and copper stockpile data support our argument that...