scholarly journals Crises and The Development of Economic Institutions: Some Microeconomic Evidence

2016 ◽  
Vol 106 (5) ◽  
pp. 524-527 ◽  
Author(s):  
Raghuram Rajan ◽  
Rodney Ramcharan
Keyword(s):  
Great Depression ◽  
Financial Crises ◽  
Financial Regulation ◽  
Banking System ◽  
Financial Instability ◽  
The Great Depression ◽  
Long Run ◽  
Level Data ◽  
Banking Markets ◽  
Bank Branching

This paper studies the long run effects of financial crises using new bank and town level data from around the Great Depression. We find evidence that banking markets became much more concentrated in areas that experienced a greater initial collapse in the local banking system. There is also evidence that financial regulation after the Great Depression, and in particular limits on bank branching, may have helped to render the effects of the initial collapse persistent. All of this suggests a reason why post-crisis financial regulation, while potentially reducing financial instability, might also have longer run real consequences.

The Oxford Handbook of Banking and Financial History

2016 ◽  
Keyword(s):  
Financial Crisis ◽  
Great Depression ◽  
Economic History ◽  
Financial Crises ◽  
Financial Regulation ◽  
Financial History ◽  
The Great Depression ◽  
Historical Reflection ◽  
Methodological Aspects

The financial crisis of 2008 aroused widespread interest in banking and financial history among policy makers, academics, journalists, and even bankers, in addition to the wider public. References in the press to the term ‘Great Depression’ spiked after the failure of Lehman Brothers in November 2008, with similar surges in references to ‘economic history’ at various times during the financial turbulence. In an attempt to better understand the magnitude of the shock, there was a demand for historical parallels. How severe was the financial crash? Was it, in fact, the most severe financial crisis since the Great Depression? Were its causes unique or part of a well-known historical pattern? And have financial crises always led to severe depressions? Historical reflection on the recent financial crises and the long-term development of the financial system go hand in hand. This volume provides the material for such a reflection by presenting the state of the art in banking and financial history. Nineteen highly regarded experts present twenty-one chapters on the economic and financial side of banking and financial activities, primarily—though not solely—in advanced economies, in a long-term comparative perspective. In addition to paying attention to general issues, not least those related to theoretical and methodological aspects of the discipline, the volume approaches the banking and financial world from four distinct but interrelated angles: financial institutions, financial markets, financial regulation, and financial crises.

To Raise the Golden Anchor? Financial Crises and Uncertainty During the Great Depression

1999 ◽  
Vol 59 (3) ◽  
pp. 624-658 ◽  
Author(s):  
J. Peter Ferderer ◽  
David A. Zalewski
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Great Depression ◽  
Interwar Period ◽  
Gold Standard ◽  
Financial Crises ◽  
Capital Flight ◽  
The Great Depression ◽  
Interest Rate Volatility

This study examines the interplay between financial crises, uncertainty, and economic growth during the interwar period. Comparing the experiences of ten countries, we provide evidence that reductions in the credibility of a country's commitment to the gold standard generated capital flight and higher interest rate volatility. This volatility, in turn, was inversely correlated with economic growth. These results suggest that financial crises helped propagate the Great Depression, in part, by increasing uncertainty.

Predicting Financial Crises in a Globalized World

2018 ◽  
pp. 63-80
Author(s):  
Asli Yuksel Mermod ◽  
Ülkü Yüksel ◽  
Catherine Sutton-Brady
Keyword(s):  
Great Depression ◽  
Early Warning ◽  
Financial Crises ◽  
Banking System ◽  
Lessons Learned ◽  
Warning Signals ◽  
Fundamental Causes ◽  
Liquidity Crises ◽  
Globalized World

This chapter highlights the facts about financial crises and their fundamental causes on specific incidents, including the 1929 Great Depression that lasted until the early-1940s, 1997 Asian Financial Crises, 1998 Russian Financial Crises, and the Liquidity Crises of 2008, and makes a comparison among them and their various outcomes. In doing so, the study specifies the cues that emerge in the financial system that may help governments predict upcoming financial crises through those early warning signals. This case study specifically analyses the Turkish Banking System that was restructured after the enormous financial crises in Turkey in 2001, which caused many Turkish banks to collapse. However, the precautions taken in the aftermath of the financial turmoil allowed them to survive the liquidity crises in 2008. The indicators of an upcoming crisis are examined, the lessons learned from this case are analyzed, and important recommendations to overcome banking crises are provided.

The Check is in the Mail: Correspondent Clearing and the Collapse of the Banking System, 1930 to 1933

2007 ◽  
Vol 67 (3) ◽  
pp. 643-671 ◽  
Author(s):  
Gary Richardson
Keyword(s):  
Great Depression ◽  
Banking System ◽  
Banking Crises ◽  
The Great Depression ◽  
Clearing System

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.

scholarly journals Conjuring the spirit of multilateralism: Histories of crisis management during the ‘great credit crash’

2015 ◽  
Vol 42 (2) ◽  
pp. 227-246 ◽  
Author(s):  
AMIN SAMMAN
Keyword(s):  
Crisis Management ◽  
Financial Crises ◽  
Global Financial Crisis ◽  
Historical Narratives ◽  
The Political ◽  
Financial Instability ◽  
Historical Process ◽  
The Public ◽  
The Great Depression ◽  
Magic Trick

AbstractIn recent years, critical scholars have emphasised how the recollection of past events as traumas can both constrain and widen the political possibilities of a present. This article builds on such research by suggesting that the management of contemporary financial crises is reliant on a ritual work of repetition, wherein prior ‘crisis’ episodes are called upon to identify and authorise specific sites and modes of crisis management. In order to develop this argument, I focus on how past crises figure within the public pronouncements of four key policymaking organisations during the financial instability of 2007–9. I find that while the Great Depression does enable these organisations to reaffirm old ways of managing crises, both it and the more recent Asian crisis are also made to disclose new truths about the evolution of multilateralism as a form of governance. In so doing, I argue, these historical narratives reveal how the management of global financial crisis depends upon a kind of ‘magic trick’. Rather than a strictly rational, historical process of problem solving, contemporary crises are instead negotiated through a contingent and self-referential conjuring of crisis-histories.

scholarly journals Hall of Mirrors: The Great Depression, the Great Recession, and the Uses—and Misuses—of History

2015 ◽  
Vol 89 (3) ◽  
pp. 557-569 ◽  
Author(s):  
Per H. Hansen
Keyword(s):  
United States ◽  
Great Depression ◽  
Great Recession ◽  
Financial Crises ◽  
The United States ◽  
Comparative Approach ◽  
The Great Recession ◽  
The Great Depression ◽  
Successful Search ◽  
Similarities And Differences

Barry Eichengreen's new bookHall of Mirrorsis a detailed, excellent, and somewhat pessimistic comparison of the two most serious financial crises ever—their causes, development, and consequences. Readers well versed in the comprehensive literature on the Great Depression and the Great Recession in the United States and Europe will not find much information inHall of Mirrorsthat is completely new, but most others will. Whatisnew is the comparative approach: the detailed and analytically successful search for similarities and differences between the Great Depression and the Great Recession.

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