Contagious Bank Failures in a Free Banking System : A Persistant Misunderstanding

A recurring citation in systemic risk literature reviews (P. Aghion, P. Bolton, and M. Dewatripont. 2000. “Contagious Bank Failures in a Free Banking System.” European Economic Review 44:713–18) offers a model where what they describe as a free banking system is vulnerable to contagious bank runs through clearinghouse loans. The paper ignores key contributions to both free banking and financial history literature, such that the paper is of little relevance to the understanding of the stability of both free banking systems and clearinghouse arrangements. Our criticism concentrates on the institutions of banking absent or misrepresented. It is argued that their conclusions are inapplicable to free banking

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Year of publication:	2017
Authors:	Bédard, Mathieu
Publisher:	[2017]: [S.l.] : SSRN
Subject:	Bankinsolvenz \| Bank failure \| Theorie \| Theory \| Bankenkrise \| Banking crisis \| Bankenaufsicht \| Banking supervision \| Moral Hazard \| Moral hazard \| Währungswettbewerb \| Currency competition
Description of contents:	Abstract [papers.ssrn.com] ; Abstract [doi.org]

Extent:	1 Online-Ressource
Type of publication:	Book / Working Paper
Language:	English
Notes:	In: 2014. Journal des Économistes et des Études Humaines 20 (1): 71-78 Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 7, 2013 erstellt Volltext nicht verfügbar
Other identifiers:	10.2139/ssrn.2336954 [DOI]
Classification:	D02 - Institutions: Design, Formation, and Operations ; G21 - Banks; Other Depository Institutions; Mortgages ; G3 - Corporate Finance and Governance ; N2 - Financial Markets and Institutions
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012973909