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The Panic of 1857 as a Bank-Initiated Banking Panic

Marini, François (2005), The Panic of 1857 as a Bank-Initiated Banking Panic, XXIIèmes Journées d’Economie Monétaire et Bancaire, 2005-06, Strasbourg, France

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Type
Communication / Conférence
Date
2005
Conference title
XXIIèmes Journées d’Economie Monétaire et Bancaire
Conference date
2005-06
Conference city
Strasbourg
Conference country
France
Pages
12
Metadata
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Author(s)
Marini, François
Abstract (EN)
We construct a model in which a banking panic is triggered by the banker, not the depositors. When a banker receives a pessimistic information on the return of the bank s assets, he liquidates them prematurely in order to protect his capital. In the face of this liquidation, all depositors withdraw their funds prematurely. Such a panic occured in 1857. This kind of banking panic occurs at sufficiently capitalized banks.
Subjects / Keywords
banking panic; panic of 1857; credit crunch
JEL
G34 - Mergers; Acquisitions; Restructuring; Corporate Governance