Advanced Search
MyIDEAS: Login to save this paper or follow this series

Bank Supervision, Regulation, and Instability During the Great Depression

Contents:

Author Info

  • Kris James Mitchener
Registered author(s):

    Abstract

    Even after controlling for local economic conditions, differences in state bank supervision and regulation contribute toward explaining the large variation in state bank suspension rates across U.S. counties during the Great Depression. More stringent capital requirements lowered suspension rates while laws prohibiting branch banking and imposing high reserve requirements had the opposite effect. States that endowed bank supervisors with the authority to liquidate banks minimized contagion and credit-channel dislocations and experienced lower suspension rates. Those that gave their supervisors sole authority to issue bank charters and that granted their supervisors long terms strengthened the incentives for bank lobbyists to influence supervisory decisions and consequently experienced higher rates of suspension.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.nber.org/papers/w10475.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10475.

    as in new window
    Length:
    Date of creation: May 2004
    Date of revision:
    Publication status: published as Mitchener, Kris James. "Bank Supervision, Regulation, And Instability During The Great Depression," Journal of Economic History, 2005, v65(1,Mar), 152-185.
    Handle: RePEc:nbr:nberwo:10475

    Note: DAE ME
    Contact details of provider:
    Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
    Phone: 617-868-3900
    Email:
    Web page: http://www.nber.org
    More information through EDIRC

    Related research

    Keywords:

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Djankov, Simeon & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2001. "The Regulation of Entry," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp01-015, Harvard University, John F. Kennedy School of Government.
    2. Asli Demirguc-Kunt & Enrica Detragiache, 2000. "Does Deposit Insurance Increase Banking System Stability? An Empirical Investigation," Econometric Society World Congress 2000 Contributed Papers, Econometric Society 1751, Econometric Society.
    3. David C. Wheelock, 1995. "Regulation, market structure and the bank failures of the Great Depression," Review, Federal Reserve Bank of St. Louis, Federal Reserve Bank of St. Louis, issue Mar, pages 27-38.
    4. Barth, James R. & Caprio Jr, Gerard & Levine, Ross, 2001. "The regulation and supervision of banks around the world - a new database," Policy Research Working Paper Series 2588, The World Bank.
    5. Kahane, Yehuda, 1977. "Capital adequacy and the regulation of financial intermediaries," Journal of Banking & Finance, Elsevier, Elsevier, vol. 1(2), pages 207-218, October.
    6. Elizabeth S. Laderman & Ronald H. Schmidt & Gary C. Zimmerman, 1991. "Location, branching, and bank portfolio diversification: the case of agricultural lending," Economic Review, Federal Reserve Bank of San Francisco, Federal Reserve Bank of San Francisco, issue Win, pages 24-38.
    7. Martimort, David, 1999. "The Life Cycle of Regulatory Agencies: Dynamic Capture and Transaction Costs," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 66(4), pages 929-47, October.
    8. Kevin L. Kliesen & R. Alton Gilbert, 1996. "Are some agricultural banks too agricultural?," Review, Federal Reserve Bank of St. Louis, Federal Reserve Bank of St. Louis, issue Jan, pages 23-36.
    9. Grossman, Richard S., 1994. "The Shoe That Didn't Drop: Explaining Banking Stability During the Great Depression," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 54(03), pages 654-682, September.
    10. Barth, James R. & Caprio, Gerard Jr. & Levine, Ross, 2004. "Bank regulation and supervision: what works best?," Journal of Financial Intermediation, Elsevier, Elsevier, vol. 13(2), pages 205-248, April.
    11. Laffont, Jean-Jacques & Tirole, Jean, 1991. "The Politics of Government Decision-Making: A Theory of Regulatory Capture," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 106(4), pages 1089-127, November.
    12. Frederic S. Mishkin, 2001. "Prudential Supervision: Why Is It Important and What Are the Issues?," NBER Chapters, in: Prudential Supervision: What Works and What Doesn't, pages 1-30 National Bureau of Economic Research, Inc.
    13. Kim, Daesik & Santomero, Anthony M, 1988. " Risk in Banking and Capital Regulation," Journal of Finance, American Finance Association, American Finance Association, vol. 43(5), pages 1219-33, December.
    14. Charles W. Calomiris & Joseph R. Mason, 2001. "Causes of U.S. bank distress during the depression," Proceedings, Federal Reserve Bank of Chicago 714, Federal Reserve Bank of Chicago.
    15. Mark Carlson, 2004. "Are Branch Banks Better Survivors? Evidence from the Depression Era," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 42(1), pages 111-126, January.
    16. Michelle Clark Neely & David C. Wheelock, 1997. "Why does bank performance vary across states?," Review, Federal Reserve Bank of St. Louis, Federal Reserve Bank of St. Louis, issue Mar, pages 27-40.
    17. Cothren, Richard D & Waud, Roger N, 1994. "On the Optimality of Reserve Requirements," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 26(4), pages 827-38, November.
    18. Besanko, David & Kanatas, George, 1993. "Credit Market Equilibrium with Bank Monitoring and Moral Hazard," Review of Financial Studies, Society for Financial Studies, Society for Financial Studies, vol. 6(1), pages 213-32.
    19. Stiroh, Kevin J & Strahan, Philip E, 2003. " Competitive Dynamics of Deregulation: Evidence from U.S. Banking," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 35(5), pages 801-28, October.
    20. Wacht, Richard F., 1968. "Branch Banking and Risk," Journal of Financial and Quantitative Analysis, Cambridge University Press, Cambridge University Press, vol. 3(01), pages 97-107, March.
    21. Grossman, Richard S, 2001. "Double Liability and Bank Risk Taking," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 33(2), pages 143-59, May.
    22. Ferri, Giovanni & Tae Soo Kang, 1999. "The credit channel at work - lessons from the Republic of Korea's financial crisis," Policy Research Working Paper Series 2190, The World Bank.
    23. Andrew P. Meyer & Timothy J. Yeager, 2001. "Are small rural banks vulnerable to local economic downturns?," Review, Federal Reserve Bank of St. Louis, Federal Reserve Bank of St. Louis, issue Mar, pages 25-38.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Mark Carlson & Kris James Mitchener, 2005. "Branch Banking, Bank Competition, and Financial Stability," NBER Working Papers 11291, National Bureau of Economic Research, Inc.
    2. Gary Richardson, 2006. "Bank Distress During the Great Contraction, 1929 to 1933, New Data from the Archives of the Board of Governors," NBER Working Papers 12590, National Bureau of Economic Research, Inc.
    3. Gary Richardson, 2006. "Bank Distress during the Great Depression: The Illiquidity-Insolvency Debate Revisited," NBER Working Papers 12717, National Bureau of Economic Research, Inc.
    4. Gary Richardson, 2006. "Quarterly Data on the Categories and Causes of Bank Distress During the Great Depression," NBER Working Papers 12715, National Bureau of Economic Research, Inc.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:10475. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.