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Interbank Networks and the Interregional Transmission of Financial Crises: Evidence from the Panic of 1907

Matthew Jaremski and David Wheelock

No 2022-020, Working Papers from Federal Reserve Bank of St. Louis

Abstract: This paper provides quantitative evidence on interbank transmission of financial distress in the Panic of 1907 and ensuing recession. Originating in New York City, the panic led to payment suspensions and emergency currency issuance in many cities. Data on the universe of interbank connections show that i) suspension was more likely in cities whose banks had closer ties to banks at the center of the panic, ii) banks with such links were more likely to close in the panic and recession, and iii) banks responded to the panic by rearranging their correspondent relationships, with implications for network structure.

Keywords: banking panics; interbank network; contagion; bank closures; Panic of 1907 (search for similar items in EconPapers)
JEL-codes: E42 E44 G01 G21 N11 N21 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2022-09, Revised 2023-09
New Economics Papers: this item is included in nep-ban, nep-his, nep-mon, nep-net, nep-pay and nep-ure
Note: Publisher DOI: https://doi.org/10.1017/S0022050724000512
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Published in Journal of Economic History

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Related works:
Journal Article: Interbank Networks and the Interregional Transmission of Financial Crises: Evidence from the Panic of 1907 (2025) Downloads
Working Paper: Interbank Networks and the Interregional Transmission of Financial Crises: Evidence from the Panic of 1907 (2023) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:94716

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DOI: 10.20955/wp.2022.020

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