Oh, how the mighty have fallen: The bank failures and near failures that started America’s greatest financial panics

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Abstract

This paper examines the failures or in some cases near-failures of financial institutions that started the 12 most severe peacetime financial panics in the United States, beginning with the Panic of 1819 and ending with the Panic of 2008. The following generalizations were true in most cases, although not in all. (1) Panics were triggered by a short series of failures or near-failures; (2) many of the failing institutions were what we would now call shadow banks; (3) typically, the source of trouble was an excessive investment in real estate; and (4) typically, they had outstanding reputations for trustworthiness, prudence, and financial acumen—before they failed. It appears that in these respects the Panic of 2008 was an old-school panic.

Original languageEnglish (US)
Pages (from-to)331-358
Number of pages28
JournalJournal of Economic History
Volume81
Issue number2
DOIs
StatePublished - Jun 2021

All Science Journal Classification (ASJC) codes

  • History
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)

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