What Caused Chicago Bank Failures in the Great Depression? A Look at the 1920s

• 成果类型: Article
• 署名作者: University of Warwick
• 刊物名称: JOURNAL OF ECONOMIC HISTORY
• ISSN/ISSBN: 0022-0507
• DOI: 10.1017/S002205071600053X
• 发表日期: 2016
• 页码: 478-519
• 关键词: federal-reserve; panics; management; contagion; distress; LESSONS; lender; CRISIS; 1930s

摘要

This article reassesses the causes of Chicago state bank failures during the Great Depression by tracking the evolution of their balance sheets in the 1920s. I find that all banks suffered tremendous deposit withdrawals; however banks that failed earlier in the 1930s had invested more in mortgages in the 1920s. The main problem with mortgages was their lack of liquidity, not their quality. Banks heavily engaged in mortgages did not have enough liquid assets to face the withdrawals, and failed. This article thus reasserts the importance of pre-crisis liquidity risk management in preventing bank failures.