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Unsettled Account:
The Evolution of Banking in the Industrialized World since 1800
Richard S. Grossman

Book Description | Reviews
Chapter 1 [in PDF format]


List of Illustrations xiii
List of Tables xv
Preface xvii

CHAPTER 1: Introduction 1
The Challenge of Intermediation 1
Banking and Economic Growth 5
Securities Markets, Banks, and Other Intermediators 10
The Scope of This Book 13
The Argument 16

CHAPTER Outline 27

CHAPTER 2: The Origins of Banking 28
Early Banking Functions 30
Credit Creation 32
Medieval Beginnings, Modern Prerequisites 35
Government Debt and the Beginnings of Government Banks 38
Government Banks 41
Private Banks 45
Commercial Banks 48

CHAPTER 3: Banking Crises 53
Financial Crises and Banking Crises 54
The Consequences of Banking Crises 59
The Causes of Banking Crises: Hypotheses 61
Evidence from before 1870 64
Evidence from 1870 to World War I 66
Evidence from the Interwar Period 74
A Durable Pattern 81

CHAPTER 4: Rescuing the Banking System: Bailouts, Lenders of Last Resort, and More Extreme Measures 83
Bailouts 86
Lenders of Last Resort 98
More Extreme Measures 104
Making the Cure Less Costly than the Disease 107

CHAPTER 5: Merger Movements 110
Consequences of Mergers 111
The Urge to Merge 112
Evidence 115
Matching Evidence with Explanations 120

CHAPTER 6: Regulation 128
Motives for Regulation 129
Entry Regulation 134
The Emergence of Charters 134
Banking Codes versus Corporation Law 141
Capital Requirements 145
The Role of Capital 145
Market Capital Requirements 147
Explaining Government Capital Requirements 150
The Impact of Government Capital Requirements 155
Other Regulations 157
Universal Banking 157
Identity of the Banking Supervisor 162
Summary 167

CHAPTER 7: Banking Evolution in England 169
The Bank of England and British Government Finance 170
Private Banking in London and the Provinces 173
Joint Stock Banking Regulation, 1826-57 175
Mergers 183
Crises and Responses 189
Fiscally Driven Evolution 195

CHAPTER 8: Banking Evolution in Sweden 197
The Riksbank and the Beginnings of Swedish Banking 198
Bank Politics and Legislation: Enskilda Banks 202
The Emergence of Modern Banking 207
Mergers, Crises, and Government Intervention, 1903-39 209
Universal Banking 215
Sweden in a Nordic Context 217

CHAPTER 9: Banking Evolution in the United States 221
The First and Second Banks of the United States, 1791-1836 222
From Chartered to Free Banking, 1837-62 229
The National Banking Era, 1863-1913 230
The Crisis of 1907 and the Founding of the Federal Reserve 243
The Great Depression 245
Summary 249

CHAPTER 10: Constrained and Deregulated Banking in the Twentieth Century and Beyond 251
Constrained Banking 251
The Era of Deregulation Begins 260
Crises and Rescues 266
Herstatt and Franklin National 267
The U.S. Savings and Loan Crisis 269
The Nordic Crises 272
Japan's "Lost Decade" 276
Crises and Rescues: Summary 281
Mergers 282
Regulation 284

Appendix to Chapter 2 291
Appendix to Chapter 3 297
Appendix to Chapter 5 317
Bibliography 321
Index 375

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File created: 4/21/2017

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