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Free Bank Failures In New York And Wisconsin: A Portfolio Analysis, Andrew J. Economopoulos
Free Bank Failures In New York And Wisconsin: A Portfolio Analysis, Andrew J. Economopoulos
Business and Economics Faculty Publications
Rolnick and Weber found that a sharp decline in asset prices led to bank panics and, ultimately, bank failures during the free banking era. An examination of New York and Wisconsin free bank portfolios prior to a fall in asset prices indicates banks that weathered the turmoil held significantly different portfolios than closed banks. In general, solvent banks held more loans and specie, and issued more deposits and less bank notes than closed banks.
The New York Free Banking Era: Deregulation Or Reregulation?, Andrew J. Economopoulos
The New York Free Banking Era: Deregulation Or Reregulation?, Andrew J. Economopoulos
Business and Economics Faculty Publications
The deregulation of the banking market is a frequently debated policy issue. Proponents of deregulation claim that free market forces would improve market efficiency. The basis for their argument is grounded in the work and tenets of Adam Smith. Deregulation opponents claim that a bank market left unfettered would disrupt the financial market; bank mismanagement, failures, and panics would pervade the market and cause distrust of the banking system . Opponents of deregulation derive their beliefs from actual historical experiences rather than theory . Many opponents point to a period of American banking history, called the Free Banking Era (1838-1863), …
The Impact Of Reserve Requirements On Free Bank Failures, Andrew J. Economopoulos
The Impact Of Reserve Requirements On Free Bank Failures, Andrew J. Economopoulos
Business and Economics Faculty Publications
The Free Banking Era, noted for numerous bank failures and large creditor losses, has been traditionally viewed as the experiment in laissez-faire banking that failed. Current researchers have found evidence suggesting that bank failures and creditor losses were limited to selected states and have linked the cause of bank failures to periods of falling asset prices. Free banks were required to hold long-term assets as primary reserves for short-term liabilities. Current banking theory suggests that the maturity imbalance between assets and liabilities increases the free bank's exposure to interest rate risk. Some states imposed a secondary reserve, the specie reserve …