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Distress During The Great Depression: The Illiquidity-Insolvency Debate Revisited, Gary Richardson

Gary Richardson

During the contraction from 1929 to 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 analysis demonstrates both illiquidity and insolvency were substantial sources of bank distress. Periods of heightened distress were correlated with periods of increased illiquidity. Contagion via correspondent networks and bank runs propagated the initial banking panics. As the depression deepened and asset values declined, insolvency loomed as the principal threat to depository institutions.

Deposit Insurance And Moral Hazard: Capital, Risk, Malfeasance, And Mismanagement. A Comment On ‘Deposit Insurance And Moral Hazard: Evidence From Texas Banking During The 1920s, Gary Richardson

Gary Richardson

A Journal of Economic History article by Linda Hooks and Kenneth Robinson, “Deposit Insurance and Moral Hazard: Evidence from Texas Banking During the 1920s,” contains a contradiction (Hooks and Robinson 2002). Pondering the contradiction in the paper reveals insights that the authors may have overlooked. Hooks and Robinson’s article examines the experience of the banking industry in Texas during the 1920s. Texas operated a deposit-insurance system from January 1, 1910 until February 11, 1927. Deposit insurance was mandatory for all state banks, which were given the choice of two plans in which to participate. The preponderance participated in the depositors …

Check Is In The Mail: Correspondent Clearing And The Banking Panics Of The Great Depression, Gary Richardson

Gary Richardson

Weaknesses within the check-clearing system played a hitherto unrecognized role in the banking crises of the Great Depression. Correspondent check-clearing networks were vulnerable to counter-party cascades. Accounting conventions that overstated reserves available to corresponding institutions may have exacerbated the situation. The initial banking panic began when a correspondent network centered in Nashville collapsed, forcing over 100 institutions to suspend operations. As the contraction continued, additional correspondent systems imploded. The vulnerability of correspondent networks is one reason that banks that cleared via correspondents failed at higher rates than other institutions during the Great Depression.

¿Cuál Geografía?, Shawn Van Ausdal, Claudia Leal, Alejandro Guarín

Shawn Van Ausdal

A review of the conception of geography in two books written by economists: John Gallup, Alejandro Gaviria and Eduardo Lora, América Latina: ¿condenada por su geografía? (Banco Mundial y Alfaomega Colombiana, 2003); and

Santiago Montenegro, Sociedad abierta, geografía y desarrollo (Norma, 2006).

La Governance Nell'azienda Comune Di Milano Dall'xi Al Xiii Secolo, Paola Saracino

Paola Saracino

L’idea di una ricerca a carattere storico sulla Governance nell’azienda Comune di Milano tra il secolo XI e XIII nasce dalla piena condivisione del pensiero di De Roover circa l’ oggetto di indagine della storia della ragioneria; lo storico infatti afferma che la storia della ragioneria, oltre ad indagare le origini dei conti, deve anche occuparsi della struttura e amministrazione delle aziende del passato al fine di analizzarne la direzione o governo, la gestione, il controllo e la programmazione. La presente ricerca storica assume come quadro teorico di riferimento alcuni assiomi che vengono delineati riprendendo anche alcuni cenni dottrinali. Il …