The Lender of Last Resort and the Run on the Savings and Loans
Speculative runs on asset price fixing schemes are most often attributed either to an inexplicable mass hysteria or to a sudden, unpredictable random disturbance. Such attribution places runs and panics outside of the realm of scientific inquiry. Alternatively, in this paper I define the notion of a run as a discontinuous shift in portfolio asset holdings brought about by a belief in the end of the price fixing regime. I also argue that runs are foreseeable events and employ the current difficulties of S & L's to serve as an extended example which emphasizes such predictability.
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| Length: | |
| Date of creation: | Dec 1981 |
| Date of revision: | |
| Handle: | RePEc:nbr:nberwo:0823 |
| Note: | EFG |
| Contact details of provider: | Postal: Phone: 617-868-3900 Web page: http://www.nber.orgEmail: More information through EDIRC
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References listed on IDEAS
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- Jack Guttentag & Richard Herring, . "The Insolvency of Financial Institutions: Assessment and Regulatory Disposition," Rodney L. White Center for Financial Research Working Papers 17-81, Wharton School Rodney L. White Center for Financial Research.
- Stephen W. Salant & Dale W. Henderson, 1976. "Market anticipations, government policy, and the price of gold," International Finance Discussion Papers 81, Board of Governors of the Federal Reserve System (U.S.).
- Sargent, Thomas J & Wallace, Neil, 1973. "The Stability of Models of Money and Growth with Perfect Foresight," Econometrica, Econometric Society, vol. 41(6), pages 1043-48, November.
- Salant, Stephen W & Henderson, Dale W, 1978. "Market Anticipations of Government Policies and the Price of Gold," Journal of Political Economy, University of Chicago Press, vol. 86(4), pages 627-48, August.
- Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-25, August.
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