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

Matthew Jaremski and David Wheelock

No 31270, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: E44 G21 N11 N12 (search for similar items in EconPapers)
Date: 2023-05
New Economics Papers: this item is included in nep-ban, nep-his, nep-net, nep-pay and nep-ure
Note: DAE
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Related works:
Journal Article: Interbank Networks and the Interregional Transmission of Financial Crises: Evidence from the Panic of 1907 (2025)
Working Paper: Interbank Networks and the Interregional Transmission of Financial Crises: Evidence from the Panic of 1907 (2023)
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