The Panic of 1857 as a Bank-Initiated Banking Panic

We construct a model in which a banking panic is triggered by the banker, not the depositors. When a banker receives a pessimistic information on the return of the bank s assets, he liquidates them prematurely in order to protect his capital. In the face of this liquidation, all depositors withdraw their funds prematurely. Such a panic occured in 1857. This kind of banking panic occurs at sufficiently capitalized banks.

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Year of publication:	2005-06
Authors:	Marini, François
Institutions:	Université Paris-Dauphine (Paris IX)
Subject:	banking panic \| panic of 1857 \| credit crunch

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Extent:	application/pdf
Series:	Economics Papers from University Paris Dauphine.
Type of publication:	Book / Working Paper
Classification:	G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010706663