Interbank Networks and the Interregional Transmission of Financial Crises: Evidence from the Panic of 1907 / 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. w31270.

NBER working paper series no. w31270

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

This paper provides quantitative evidence on interbank transmission of financial distress in the Panic of 1907 and ensuing recession. Originating in New York City, the panic led to payment suspensions and emergency currency issuance in many cities. Data on the universe of interbank connections show that i) suspension was more likely in cities whose banks had closer ties to banks at the center of the panic, ii) banks with such links were more likely to close in the panic and recession, and iii) banks responded to the panic by rearranging their correspondent relationships, with implications for network structure.

Notes:

Print version record

May 2023.