An examination of contagious bank runs and a discussion of how private clearinghouses have protected against widespread bank failures, with the determination that federal deposit insurance may not be necessary to protect against runs; conclusion of February 1 issue.

The need for federal deposit insurance is often based on the claim that it prevents bank runs and makes the banking system more stable. But research shows that banks could prevent bank runs by constructing their deposit contracts appropriately, and, in the absence of deposit insurance, they...

An analysis of the costs and benefits of providing federal deposit insurance as a means of preventing widespread bank failures, and the role of bank regulators in assuring bank solvency; article concludes with February 15 issue.

A discussion of the fundamental economic principles to consider in evaluating proposals to reform the current system of federal deposit insurance.