EconPapers    
Economics at your fingertips  
 

Interbank networks in the National Banking Era: Their purpose and their role in the Panic of 1893

Charles W. Calomiris and Mark Carlson ()

Journal of Financial Economics, 2017, vol. 125, issue 3, 434-453

Abstract: The unit banking structure of the United States produced a uniquely important interbank correspondent network. During the National Banking Era, this network normally provided banks with access to money markets, facilitated payment processing, and helped banks meet legal reserve requirements. In crises, network connections could be a source of liquidity risk. That risk became evident during the Panic of 1893, when New York suspended convertibility. Banks with high two-sided liquidity risk (those holding more of their liquid assets with their correspondents and funded to a greater extent by deposits of other banks) were particularly exposed and more likely to close.

Keywords: Interbank networks; Correspondent banking; Banking panics; Contagion; National Banking Era (search for similar items in EconPapers)
JEL-codes: G01 G21 N21 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304405X17301241
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Interbank networks in the national banking era: their purpose and their role in the panic of 1893 (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:125:y:2017:i:3:p:434-453

Access Statistics for this article

Journal of Financial Economics is currently edited by G. William Schwert

More articles in Journal of Financial Economics from Elsevier
Series data maintained by Dana Niculescu ().

 
Page updated 2017-12-07
Handle: RePEc:eee:jfinec:v:125:y:2017:i:3:p:434-453