The Legacy of Deposit Insurance: The Growth, Spread, and Cost of Insuring Financial Intermediaries
In: The Defining Moment: The Great Depression and the American Economy in the Twentieth Century
AbstractWithout the Great Depression, the United States would not have adopted deposit insurance. While the New Deal's anti-competitive barriers have largely collapsed become" deeply rooted. This paper examines how market and political competition for deposits raised the level of coverage and spread insurance to all depository institutions. A comparison of the cost of federal insurance with a counterfactual of an insurance-free system shows that federal insurance ultimately imposed a" higher cost but achieved political acceptance because of the distribution of the burden.
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Other versions of this item:
- Eugene N. White, 1997. "The Legacy of Deposit Insurance: The Growth, Spread, and Cost of Insuring Financial Intermediaries," NBER Working Papers 6063, National Bureau of Economic Research, Inc.
- N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
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