Without 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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
6063.
Length: Date of creation: Jun 1997 Date of revision: Publication status: published as Eugene N. White. "The Legacy of Deposit Insurance: The Growth, Spread, and Cost of Insuring Financial Intermediaries," in Michael D. Bordo, Claudia Goldin and Eugene N. White, editors, "The Defining Moment: The Great Depression and the American Economy in the Twentieth Century" University of Chicago Press (1998) Handle: RePEc:nbr:nberwo:6063
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Find related papers by JEL classification: N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
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.:
Milton Friedman & Anna J. Schwartz, 1987.
"Has Government Any Role in Money?,"
NBER Chapters,
in: Money in Historical Perspective, pages 289-314
National Bureau of Economic Research, Inc.
[Downloadable!]
Charles W. Calomiris & Eugene N. White, 1994.
"The Origins of Federal Deposit Insurance,"
NBER Chapters,
in: The Regulated Economy: A Historical Approach to Political Economy, pages 145-188
National Bureau of Economic Research, Inc.
[Downloadable!]
Cited by: (explanations, 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.)