Local Banking Panics of the 1920s: Identification and Determinants
40 Pages Posted: 5 Nov 2012 Last revised: 2 May 2014
Date Written: November 4, 2012
Using a newly discovered dataset of U.S. bank suspensions from 1921 to 1929, we discovered that banking panics were more common in the 1920s than had been believed. Besides identifying panics, we investigate their determinants, finding that local banking panics were more likely when fundamental economic conditions were generally weak and more likely in “overbanked” states; they were less likely in states with deposit insurance or states where a relatively large share of banks belonged to chain banking organizations.
Keywords: Bank Runs, Banking Panics, Cluster Analysis, U.S. Banking History
JEL Classification: N22, G21
Suggested Citation: Suggested Citation