Postel-Vinay, Natacha 
ORCID: 0000-0002-0712-3519
(2016)
What caused Chicago bank failures in the Great Depression? A look at the 1920s.
Journal of Economic History, 76 (2).
478 - 519.
ISSN 0022-0507
|
Text
- Accepted Version
Download (624kB) | Preview |
Abstract
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.
| Item Type: | Article |
|---|---|
| Official URL: | https://www.cambridge.org/core/journals/journal-of... |
| Additional Information: | © 2016 The Economic History Association |
| Divisions: | Economic History |
| Subjects: | F History United States, Canada, Latin America > F001 United States local history H Social Sciences > HC Economic History and Conditions |
| Date Deposited: | 29 Jun 2018 13:51 |
| Last Modified: | 12 Dec 2024 01:20 |
| URI: | http://eprints.lse.ac.uk/id/eprint/88844 |
Actions (login required)
 |
View Item |
Download Statistics
Download Statistics