Too-Big-To-Fail Before the Fed

Gary Gorton and Ellis Tallman

No 22064, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: “Too-big-to-fail” is consistent with policies followed by private bank clearing houses during financial crises in the U.S. National Banking Era prior to the existence of the Federal Reserve System. Private bank clearing houses provided emergency lending to member banks during financial crises. This behavior strongly suggests that “too-big-to-fail” is not the problem causing modern crises. Rather it is a reasonable response to the threat posed to large banks by the vulnerability of short-term debt to runs.

JEL-codes: E02 E32 E42 E52 E58 (search for similar items in EconPapers)
Date: 2016-03
New Economics Papers: this item is included in nep-ban, nep-mac and nep-mon
Note: DAE EFG ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published as Gary Gorton & Ellis W. Tallman, 2016. "Too Big to Fail before the Fed," American Economic Review, American Economic Association, vol. 106(5), pages 528-32, May.

Downloads: (external link)
http://www.nber.org/papers/w22064.pdf (application/pdf)

Related works:
Journal Article: Too Big to Fail before the Fed (2016)
Working Paper: Too-Big-to-Fail before the Fed (2016)
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:nbr:nberwo:22064

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w22064

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().