Regulation and Bank Failures: New Evidence from the Agricultural Collapse of the 1920s
AbstractThis article examines the contribution of government policies to the high number of bank failures in the United States during the l920s. I consider the state of Kansas, which had a system of voluntary deposit insurance and where branch banking was strictly prohibited, and find that bank failure rates were highest in counties suffering the greatest agricultural distress and where deposit insurance system membership was the highest. The evidence for Kansas illustrates how prohibitions on branch banking caused unit banks to be especially susceptible to local economic shocks, and suggests that, despite regulations to limit risktaking, deposit insurance caused more bank failures than would have occurred otherwise.
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Bibliographic InfoArticle provided by Cambridge University Press in its journal The Journal of Economic History.
Volume (Year): 52 (1992)
Issue (Month): 04 (December)
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Other versions of this item:
- David C. Wheelock, 1991. "Regulation and bank failures: new evidence from the agricultural collapse of the 1920's," Working Papers 1991-006, Federal Reserve Bank of St. Louis.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Does the structure of banking markets affect economic growth? evidence from U.S. state banking markets,"
2010-004, Federal Reserve Bank of St. Louis.
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