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NBER Working Papers and Publications
|January 2014||Corporate Governance and Risk Management at Unprotected Banks: National Banks in the 1890s|
with Charles W. Calomiris: w19806
Managers' incentives may conflict with those of shareholders or creditors, particularly at leveraged, opaque banks. Bankers may abuse their control rights to give themselves excessive salaries, favored access to credit, or to take excessive risks that benefit themselves at the expense of depositors. Banks must design contracting and governance structures that sufficiently resolve agency problems so that they can attract funding from outside shareholders and depositors. We examine banks from the 1890s, a period when there were no distortions from deposit insurance or government interventions to assist banks. We use national banks' Examination Reports to link differences in managerial ownership to different corporate governance policies, risk, and methods of risk management. Formal corporat...
Published: Calomiris, Charles W. & Carlson, Mark, 2016. "Corporate governance and risk management at unprotected banks: National banks in the 1890s," Journal of Financial Economics, Elsevier, vol. 119(3), pages 512-532. citation courtesy of
|October 2010||Arresting Banking Panics: Fed Liquidity Provision and the Forgotten Panic of 1929|
with Kris James Mitchener, Gary Richardson: w16460
Scholars differ on whether Federal Reserve intervention mitigated banking panics during the Great Depression and in recent years. The last panic prior to the Depression sheds light on this debate. In April 1929, a fruit fly infestation in Florida forced the U.S. government to quarantine fruit shipments from the state and destroy infested groves. When Congress recessed in June without approving compensation for farmers, depositors in citrus growing regions began withdrawing deposits from banks, culminating in runs on institutions in the financial center of Tampa and surrounding cities. Using archival evidence, we describe how the Federal Reserve Bank of Atlanta halted the spread of the panic by rushing currency to member banks. Analysis based on a new micro-level database of commercial bank...
Published: Arresting Banking Panics: Federal Reserve Liquidity Provision and the Forgotten Panic of 1929 Mark Carlson, Kris James Mitchener, and Gary Richardson Journal of Political Economy, Vol. 119, No. 5 (October 2011), pp. 889-924
|February 2007||Branch Banking as a Device for Discipline: Competition and Bank Survivorship During the Great Depression|
with Kris James Mitchener: w12938
Because California was a pioneer in the development of intrastate branching, we use its experience during the 1920s and 1930s to assess the effects of the expansion of large-scale, branch-banking networks on competition and the stability of banking systems. Using a new database of individual bank balance sheets, income statements, and branch establishment, we examine the characteristics that made a bank a more likely target of a takeover by a large branching network, how incumbent unit banks responded to the entry of branch banks, and how branching networks affected the probability of survival of banks during the Great Depression. We find no evidence that branching networks expanded by acquiring "lemons"; rather those displaying characteristics of more profitable institutions were more lik...
Published: Mitchener, Kris James and Mark Carlson. “Branch Banking as a Device for Discipline: Competition and Bank Survivorship during the Great Depression.” Journal of Political Economy (April 2009): 165-210. citation courtesy of
|May 2005||Branch Banking, Bank Competition, and Financial Stability|
with Kris James Mitchener: w11291
It is often argued that branching stabilizes banking systems by facilitating diversification of bank portfolios; however, previous empirical research on the Great Depression offers mixed support for this view. Analyses using state-level data find that states allowing branch banking had lower failure rates, while those examining individual banks find that branch banks were more likely to fail. We argue that an alternative hypothesis can reconcile these seemingly disparate findings. Using data on national banks from the 1920s and 1930s, we show that branch banking increases competition and forces weak banks to exit the banking system. This consolidation strengthens the system as a whole without necessarily strengthening the branch banks themselves. Our empirical results suggest that the effe...
Published: Carlson, Mark and Kris James Mitchener. "Branch Banking, Bank Competition, and Financial Stability," Journal of Money, Credit and Banking, 2006, v38(5,Aug), 1293-1328. citation courtesy of