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The seasonality of banking failures during the late National Banking Era
Author(s) -
GomisPorqueras Pere,
Smith Bruce
Publication year - 2006
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.0008-4085.2006.00348.x
Subject(s) - treasury , currency , market liquidity , monetary economics , value (mathematics) , business , investment (military) , money market , financial system , investment banking , economics , interest rate , archaeology , machine learning , politics , law , political science , history , computer science
. In this paper, we expand previous models with banks and money and explore the consequences of seasonals in the banking system. We find that, when bank failures occur, not all of them have associated large output losses and currency premiums exist. We show that the most important sources of seasonal fluctuations for the banking system are those related to the return on farming activities and the scrapping value of the initial investment. Finally, this model is consistent with the notion that the Treasury is more likely to accommodate the money market in periods where the liquidity needs are higher. JEL classification: E50, F41