This book fulfills its promise as a both a comprehensive reexamination of the history of the Federal Reserve, especially in its earlier years, and a series of provocative essays that place that history in contemporary economic thought and theory. The first essay, by Eugene White, goes into intense detail on early bank supervision and examination, an understudied but essential part of national banking. He shows that the double liability of stockholders, which, at least on the national level, could This book fulfills its promise as a both a comprehensive reexamination of the history of the Federal Reserve, especially in its earlier years, and a series of provocative essays that place that history in contemporary economic thought and theory.
He shows that the double liability of stockholders, which, at least on the national level, could be enforced by mere administrative fiat by the Comptroller of the Currency, lead to many voluntary liquidations of banks before they were in trouble, with minimal losses for depositors, at least before the FDIC act came along and ended it. They will be a useful reference to anybody studying these topics. This book is well worth a dive into or for reading the whole thing.
William rated it liked it Jun 20, Sean Moore marked it as to-read Jun 23, Donald Forster marked it as to-read Oct 13, Daniel marked it as to-read Apr 26, Franceen R marked it as to-read Nov 19, Erik Gates marked it as to-read Oct 18, Nicole marked it as to-read Nov 30, There are no discussion topics on this book yet. Books by Michael D. Trivia About The Origins, Hist No trivia or quizzes yet. The meeting resulted in the Aldrich Plan, a precursor to the Federal Reserve Act that was enacted by Congress in The conference, sponsored by the Federal Reserve Bank of Atlanta and Rutgers University, featured assessments of the Fed's near year track record by prominent economic historians and macroeconomists.
The final chapter of the book records a panel discussion of Fed policy making by the current and former senior Federal Reserve officials.
Double liability induced shareholders to carefully monitor bank managers and voluntarily liquidate banks early if they appeared to be in trouble. Inducing more disclosure, marking assets to market, and ensuring prompt closure of insolvent national banks, the Comptroller of the Currency reinforced market discipline.
The arrival of the Federal Reserve weakened this regime. Monetary policy decisions conflicted with the goal of financial stability and created moral hazard.
The appearance of the Fed as an additional supervisor led to more "competition in laxity" among regulators and "regulatory arbitrage" by banks. When the Great Depression hit, policy-induced deflation and asset price volatility were misdiagnosed as failures of competition and market valuation. In response, the New Deal shifted to a regime of discretion-based supervision with forbearance" Request this item to view in the Library's reading rooms using your library card.
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