Using monthly balance-sheet data of all major German credit banks, we analyze deposit withdrawals and bank failures in the German banking and currency crisis of 1931. We show that deposit withdrawals were related to indicators of banks' liquidity and solvency and were hence not simply the consequence of a run on the German currency. We find no evidence that branch banks were more stable than unit banks. Finally, we show that larger banks had a lower probability of failure, were more likely to be bailed out by the public authorities, and were granted preferential access to the Reichsbank's discount window. We interpret these results as evidence for a 'too-big-to-fail' phenomenon.
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Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number
03-11.
Length: 59 pages Date of creation: 11 Dec 2002 Date of revision: Handle: RePEc:xrs:sfbmaa:03-11
Note: I would like to thank Reinhold Schnabel for very helpful discussions in the early stages of this project. Moreover, I thank Jochen Bigus, Christoph Buchheim, Mark Carlson, Martin Hellwig, Hans-Joachim Voth, David Wheelock and the participants of the Annual Meeting of the Cliometric Society in Raleigh, the Banking Workshop in Muenster, the Annual Meeting of the European Economic Association in Stockholm, the Annual Meeting of the Economic History Association in Nashville, the Annual Meeting of the Verein fuer Socialpolitik in Zuerich as well as seminar participants at Pompeu Fabra and the University of Mannheim for useful comments and suggestions. Contact details of provider: Postal: D-68131 Mannheim Phone: (49) (0) 621-292-2547 Fax: (49) (0) 621-292-5594 Email: Web page: http://www.sfb504.uni-mannheim.de/ More information through EDIRC
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.:
V.V. Chari & Ravi Jagannathan, 1984.
"Banking Panics,"
Discussion Papers
618, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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