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Competitive Banking, Bankers' Clubs, and Bank Regulation


  • Dowd, Kevin


This paper reexamines the view that banking regulation and central banking arose to counter market 'failures.' It investigates the factors that led bankers to form clubs and examines the 'regulations' imposed by clubs on their members. It suggests that such regulation is different from real-world regulation and central banking and would be unlikely to arise spontaneously from free banking anyway. It also suggests that this view is consistent with available evidence and compares it with the alternative views of Gary Gorton and Donald J. Mullineaux (1987), and of Charles A. E. Goodhart. Copyright 1994 by Ohio State University Press.

Suggested Citation

  • Dowd, Kevin, 1994. "Competitive Banking, Bankers' Clubs, and Bank Regulation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(2), pages 289-308, May.
  • Handle: RePEc:mcb:jmoncb:v:26:y:1994:i:2:p:289-308

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    References listed on IDEAS

    1. Marvin Goodfriend & Monica Hargraves, 1983. "A historical assessment of the rationales and functions of reserve requirements," Economic Review, Federal Reserve Bank of Richmond, issue Mar, pages 3-21.
    2. Maurice Obstfeld, 1988. "The Effectiveness of Foreign-Exchange Intervention: Recent Experience," NBER Working Papers 2796, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Selgin, George, 2004. "Wholesale payments: questioning the market-failure hypothesis," International Review of Law and Economics, Elsevier, vol. 24(3), pages 333-350, September.
    2. Young, Andrew T. & Dove, John A., 2013. "Policing the chain gang: Panel cointegration analysis of the stability of the Suffolk System, 1825–1858," Journal of Macroeconomics, Elsevier, vol. 37(C), pages 182-196.
    3. Fernando Ossa, 2003. "Los Bancos Centrales como Prestamistas de Última Instancia," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(120), pages 323-335.
    4. David Vanhoose, 1997. "Macroeconomic stability in a free banking system," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 25(4), pages 331-343, December.
    5. Bryan Caplan & Edward Stringham, 2003. "Networks, Law, and the Paradox of Cooperation," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 16(4), pages 309-326, December.
    6. repec:kap:copoec:v:28:y:2017:i:3:d:10.1007_s10602-016-9223-9 is not listed on IDEAS
    7. Iman van Lelyveld & Arnold Schilder, 2002. "Risk in Financial Conglomerates: Management and Supervision," Research Series Supervision (discontinued) 49, Netherlands Central Bank, Directorate Supervision.
    8. Winkler, Adalbert, 2001. "On the need for an international lender of last resort: Lessons from domestic financial markets," W.E.P. - Würzburg Economic Papers 28, University of Würzburg, Chair for Monetary Policy and International Economics.

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