scholarly journals Contagion and Bank Failures During the Great Depression: The June 1932 Chicago Banking Panic

10.3386/w4934 ◽  
1994 ◽  
Author(s):  
Charles Calomiris ◽  
Joseph Mason
Keyword(s):  
Great Depression ◽  
Bank Failures ◽  
The Great Depression

scholarly journals Identifying the Effects of Bank Failures from a Natural Experiment in Mississippi during the Great Depression

2013 ◽  
Vol 5 (1) ◽  
pp. 81-101 ◽  
Author(s):  
Nicolas L Ziebarth
Keyword(s):  
Great Depression ◽  
Causal Effect ◽  
Bank Failures ◽  
Liquidity Provision ◽  
The Great Depression ◽  
Negative Effect ◽  
Quasi Experimental ◽  
Plant Level ◽  
Physical Output ◽  
Large Decline

I examine the causal effect of bank failures during the Great Depression using the quasi-experimental setup of Richardson and Troost (2009). The experiment is based on Mississippi being divided into two Federal Reserve districts, which followed different policies for liquidity provision. This translated into variation in bank failures across the state. Employing a plant-level sample from the Census of Manufactures, I find that banking failures had a negative effect on revenue stemming from a fall in physical output. I find no effect on employment at the plant-level and a large decline at the county-level. (JEL E32, E44, G21, G33, N12, N22, N92)

Bank Failures, The Great Depression, and Other “Contagious” Events

2019 ◽  
pp. 909-927
Author(s):  
Charles W. Calomiris
Keyword(s):  
Public Policy ◽  
Great Depression ◽  
Deposit Insurance ◽  
Policy Implications ◽  
Bank Failures ◽  
Historical Evidence ◽  
Lender Of Last Resort ◽  
Safety Nets ◽  
The Public ◽  
The Great Depression

Deposit withdrawal pressures on banks, which sometimes take the form of sudden runs, have figured prominently in the discussion of public policy toward banks and the construction of safety nets such as deposit insurance and the lender of last resort. This chapter examines historical evidence from the Great Depression, and other episodes, on the factors that prompted withdrawals, the discussion of contagious runs, and the public policy implications. The historical evidence is presented in detail and is connected to the debate over the proper roles of deposit market discipline via the threat of withdrawals, the insurance of deposits, and lender-of-last-resort support for banks facing withdrawal pressures.

scholarly journals What Caused Chicago Bank Failures in the Great Depression? A Look at the 1920s

2016 ◽  
Vol 76 (2) ◽  
pp. 478-519 ◽  
Author(s):  
Natacha Postel-Vinay
Keyword(s):  
Risk Management ◽  
Great Depression ◽  
Liquidity Risk ◽  
Bank Failures ◽  
Balance Sheets ◽  
The Great Depression

This article reassesses the causes of Chicago state bank failures during the Great Depression by tracking the evolution of their balance sheets in the 1920s. I find that all banks suffered tremendous deposit withdrawals; however banks that failed earlier in the 1930s had invested more in mortgages in the 1920s. The main problem with mortgages was their lack of liquidity, not their quality. Banks heavily engaged in mortgages did not have enough liquid assets to face the withdrawals, and failed. This article thus reasserts the importance of pre-crisis liquidity risk management in preventing bank failures.

Bank Portfolios and Bank Failures During the Great Depression: Chicago

1986 ◽  
Vol 46 (2) ◽  
pp. 455-462 ◽  
Author(s):  
Milton Esbitt
Keyword(s):  
Discriminant Analysis ◽  
Great Depression ◽  
Management Practices ◽  
Economic Conditions ◽  
Bank Failures ◽  
Multiple Discriminant Analysis ◽  
The Great Depression ◽  
The Poor ◽  
Contemporary Writers ◽  
Poor Management

Bank failures in Chicago during 1930–1932 are examined to determine whether failures were attributable to poor management practices or to worsening economic conditions. Non-Loop state-chartered banks were divided into those which did not fail and those which failed in 1930, 1931, and 1932. Portfolio variables which contemporary writers held were indicative of poor management practices are used in a multiple discriminant analysis. Using semiannual bank call reports from December 1927 through December 1929, support was found for the poor management hypothesis only for banks destined to fail in 1931

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