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Alternatives for Distressed Banks during the Great Depression
Author(s) -
CARLSON MARK
Publication year - 2010
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/j.1538-4616.2009.00293.x
Subject(s) - depression (economics) , recession , great depression , distress , institution , business , financial system , economics , psychology , geography , political science , keynesian economics , archaeology , law , psychotherapist
Using data on individual banks during the Great Depression, I find that institutions that failed during periods in which failures were especially numerous, such as the banking panics, appear to have been at least as financially sound as banks that were able to pursue alternative resolution strategies, such as merging with another institution or suspending and recapitalizing, during less extreme periods. This result suggests that problems associated with having numerous banks in distress simultaneously during the Depression may have exacerbated the number of banks closed and the economic downturn.