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Outside Lending in the NYC Call Loan Market

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Listed:
  • Jon R. Moen
  • Ellis W. Tallman

Abstract

Before the Panic of 1907 the large New York City banks were able to maintain the call loan market?s liquidity during panics, but the rise in outside lending by trust companies and interior banks in the decade leading up the panic weakened the influence of the large banks. Creating a reliable source of liquidity and reserves external to the financial market like a central bank became obvious after the panic. The lack of a lender of last resort for investment banks engaged in bank-like activities during the crisis of 2007-09 revealed a similar need for an external liquidity source.

Suggested Citation

  • Jon R. Moen & Ellis W. Tallman, 2014. "Outside Lending in the NYC Call Loan Market," Working Papers (Old Series) 1408, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:1408
    DOI: 10.26509/frbc-wp-201408
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    References listed on IDEAS

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    1. Moen, Jon & Tallman, Ellis W., 1992. "The Bank Panic of 1907: The Role of Trust Companies," The Journal of Economic History, Cambridge University Press, vol. 52(3), pages 611-630, September.
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    More about this item

    Keywords

    Bank panic; stock market; credit rationing; rehypothecation;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913

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