Banker Preferences, Interbank Connections, and the Enduring Structure of the Federal Reserve System / Matthew S. Jaremski, David C. Wheelock.

Format:

Book

Author/Creator:

Jaremski, Matthew S.

Contributor:

National Bureau of Economic Research.

Wheelock, David C.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21553.

NBER working paper series no. w21553

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

Established by a three person committee in 1914, the structure of the Federal Reserve System has remained essentially unchanged ever since, despite criticism at the time and over ensuing decades. With Congress now considering reforms to the System, this paper examines the original selection of cities for Reserve Banks and branches, and of district boundaries. We show that each aspect of the Fed's structure reflected the preferences of national banks, including adjustments to district boundaries after 1914. Further, using newly-collected data on interbank connections, we find that banker preferences mirrored established correspondent relationships. The Federal Reserve was thus formed on top of the structure that it was meant to replace.

Notes:

Print version record

September 2015.