Interest Rates Under the U.S. National Banking System
Bruce Champ (),
Neil Wallace () and
Economic History from University Library of Munich, Germany
According to previous studies, the demand-liability feature of national bank notes did not present a problem for note-issuing banks because the nonbank public treated notes and other currency as perfect substitutes. However, that view, when combined with nonbindingness of the collateral restriction a against note issue, itself an implication of the fact that not all eligible co collateral was used as collateral, implies that the safe short-term interest rate is pegged at the tax rate on note circulation. Since evidence on short- term interest rates is inconsistent with such a peg, that view must be rejected.
JEL-codes: N (search for similar items in EconPapers)
Note: 19 pages, text WordPerfect format, figures available from Weber
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Journal Article: Interest rates under the U.S. national banking system (1994)
Working Paper: Interest rates under the U.S. national banking system (1993)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpeh:9310001
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