TY  - JOUR
AU  - Richardson,Gary
TI  - Bank Distress During the Great Contraction, 1929 to 1933, New Data from the Archives of the Board of Governors
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12590
PY  - 2006
Y2  - October 2006
UR  - http://www.nber.org/papers/w12590
L1  - http://www.nber.org/papers/w12590.pdf
N1  - Author contact info:
Gary Richardson
Department of Economics
University of California, Irvine
3155 Social Sciences Plaza
Irvine, CA 92697-5100
Tel: 949/824-3189
Fax: 949/824-2182
E-Mail: garyr@uci.edu
AB  - During the contraction from 1929 through 1933, the Federal Reserve System tracked changes in the status of all banks operating in the United States and determined the cause of each bank suspension. This essay introduces that hitherto dormant data and analyzes chronological patterns in aggregate series constructed from it. The analysis demonstrates both illiquidity and insolvency were substantial sources of bank distress. Contagion (via correspondent networks and bank runs) propagated the initial banking panics. As the depression deepened and asset values declined, insolvency loomed as the principal threat to depository institutions. These patterns corroborate some and question other conjectures concerning the causes and consequences of the financial crisis during the Great Contraction.
ER  -