Intensified Regulatory Scrutiny and Bank Distress in New York City During the Great Depression
New data reveals that bank distress peaked in New York City, at the center of the United States money market, in July and August 1931, when the banking crisis peaked in Germany and before Britain abandoned the gold standard. This paper tests competing theories about the causes of New York's banking crisis. The cause appears to have been intensified regulatory scrutiny, which was a delayed reaction to the failure of the Bank of United States, rather than the exposure of money-center banks to events overseas.
Comments from Naomi Lamoreaux inspired us to investigate this topic. We thank Jeremy Atack, an anonymous referee, and other colleagues and friends for comments that improved this essay. NSF Grant D/SES-0551232 funded portions of this research. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Richardson, Gary & Van Horn, Patrick, 2009. "Intensified Regulatory Scrutiny and Bank Distress in New York City During the Great Depression," The Journal of Economic History, Cambridge University Press, vol. 69(02), pages 446-465, June. citation courtesy of