Bank Lending and Deposit Crunches during the Great Depression
Bank distress was a defining feature of the Great Depression in the United States. Most banks, however, weathered the storm and remained in operation throughout the contraction. We show that surviving banks cut lending when depositors withdrew funds en masse during panics. This panic-induced decline in lending explains about one-third of the reduction in aggregate commercial bank lending between 1929 and 1932, more than twice as much as attributed to the failure of banks.
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Copy CitationKris James Mitchener and Gary Richardson, "Bank Lending and Deposit Crunches during the Great Depression," NBER Working Paper 32783 (2024), https://doi.org/10.3386/w32783.Download Citation
Published Versions
Mitchener, Kris James & Richardson, Gary, 2025. "Bank Lending and Deposit Crunches during the Great Depression," The Journal of Economic History, Cambridge University Press, vol. 85(2), pages 442-474, June. citation courtesy of 
Kris James Mitchener & Gary Richardson, 2025. "Bank Lending and Deposit Crunches during the Great Depression," The Journal of Economic History, vol 85(2), pages 442-474.
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