Interest Rates Under the U.S. National Banking System

Bruce Champ, Neil Wallace () and Warren Weber

Economic History from University Library of Munich, Germany

Abstract: 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)
Pages: 19 pages
Date: 1993-10-01
Note: 19 pages, text WordPerfect format, figures available from Weber
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Citations: View citations in EconPapers (6)

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Related works:
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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