Too Big to Fail? The Newfoundland Bank Crash of 1894
Too Big to Fail? The Newfoundland Bank Crash of 1894In the Newfoundland Bank Crash of 1894, the commercial banks in a duopolistic loan market both went under simultaneously. The banking system was „free", as central bank, deposit insurance, and lender of last resort were all absent. The objecti...
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Berlin: Duncker & Humblot
2008
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ftdunckerhumblot:https://www.doi.org/10.3790/kuk.41.2.161 2024-01-07T09:44:53+01:00 Too Big to Fail? The Newfoundland Bank Crash of 1894 Chu, Kam Hon 2008-08-01 pdf https://doi.org/10.3790/kuk.41.2.161 en eng Berlin: Duncker & Humblot https://www.doi.org/10.3790/kuk.41.2.161 Open access Credit and Capital Markets – Kredit und Kapital, Vol. 41, Iss. 2: Too Big to Fail? The Newfoundland Bank Crash of 1894 K text 2008 ftdunckerhumblot https://doi.org/10.3790/kuk.41.2.161 2023-12-10T23:38:38Z Too Big to Fail? The Newfoundland Bank Crash of 1894In the Newfoundland Bank Crash of 1894, the commercial banks in a duopolistic loan market both went under simultaneously. The banking system was „free", as central bank, deposit insurance, and lender of last resort were all absent. The objective of this study is to shed light on our understanding of the working of a duopolistic bank loan market and to provide lessons for banking regulation and policies, the too-big-to-fail doctrine in particular. Our regression results suggest a price leader-follower relationship before 1887, and a drastic decline in exports that year triggered a regime change into simultaneous loan expansion that ultimately precipitated a systemic banking failure. The short-lived liquidity crisis, however, was alleviated by entries of Canadian banks. More important, results of intervention analysis suggest that the Crash did not have any significant adverse impact on the fishery sector, the pillar of the single-resource economy. (JEL E5, G2, N2) Text Newfoundland Duncker & Humblot eLibrary Pillar ENVELOPE(166.217,166.217,-77.583,-77.583) The Pillar ENVELOPE(-126.853,-126.853,57.300,57.300) Kredit und Kapital 41 2 161 195 |
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Duncker & Humblot eLibrary |
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ftdunckerhumblot |
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English |
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K Chu, Kam Hon Too Big to Fail? The Newfoundland Bank Crash of 1894 |
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Too Big to Fail? The Newfoundland Bank Crash of 1894In the Newfoundland Bank Crash of 1894, the commercial banks in a duopolistic loan market both went under simultaneously. The banking system was „free", as central bank, deposit insurance, and lender of last resort were all absent. The objective of this study is to shed light on our understanding of the working of a duopolistic bank loan market and to provide lessons for banking regulation and policies, the too-big-to-fail doctrine in particular. Our regression results suggest a price leader-follower relationship before 1887, and a drastic decline in exports that year triggered a regime change into simultaneous loan expansion that ultimately precipitated a systemic banking failure. The short-lived liquidity crisis, however, was alleviated by entries of Canadian banks. More important, results of intervention analysis suggest that the Crash did not have any significant adverse impact on the fishery sector, the pillar of the single-resource economy. (JEL E5, G2, N2) |
format |
Text |
author |
Chu, Kam Hon |
author_facet |
Chu, Kam Hon |
author_sort |
Chu, Kam Hon |
title |
Too Big to Fail? The Newfoundland Bank Crash of 1894 |
title_short |
Too Big to Fail? The Newfoundland Bank Crash of 1894 |
title_full |
Too Big to Fail? The Newfoundland Bank Crash of 1894 |
title_fullStr |
Too Big to Fail? The Newfoundland Bank Crash of 1894 |
title_full_unstemmed |
Too Big to Fail? The Newfoundland Bank Crash of 1894 |
title_sort |
too big to fail? the newfoundland bank crash of 1894 |
publisher |
Berlin: Duncker & Humblot |
publishDate |
2008 |
url |
https://doi.org/10.3790/kuk.41.2.161 |
long_lat |
ENVELOPE(166.217,166.217,-77.583,-77.583) ENVELOPE(-126.853,-126.853,57.300,57.300) |
geographic |
Pillar The Pillar |
geographic_facet |
Pillar The Pillar |
genre |
Newfoundland |
genre_facet |
Newfoundland |
op_source |
Credit and Capital Markets – Kredit und Kapital, Vol. 41, Iss. 2: Too Big to Fail? The Newfoundland Bank Crash of 1894 |
op_relation |
https://www.doi.org/10.3790/kuk.41.2.161 |
op_rights |
Open access |
op_doi |
https://doi.org/10.3790/kuk.41.2.161 |
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Kredit und Kapital |
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41 |
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2 |
container_start_page |
161 |
op_container_end_page |
195 |
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1787426313850585088 |