The Small Bank Failures of the Early 1990s: Another Story of Boom and Bust

11 Pages Posted: 7 Apr 2016 Last revised: 14 Apr 2016

See all articles by Kushal Balluck

Kushal Balluck

Bank of England

Artus Galiay

Bank of England

Gerardo Ferrara

Bank of England

Glenn Hoggarth

Bank of England

Date Written: March 18, 2016

Abstract

Prior to the recent global financial crisis, the Bank of England last provided emergency liquidity assistance to banks in the early 1990s. This was intended to prevent contagion from a group of small banks to larger, systemically important financial institutions. The Bank of England is now in a better position to guard against many of the vulnerabilities that led to the small banks crisis. History suggests that regulators should continually look for early warning signs of heightened risk in the financial system, such as rapid credit growth, a decline in underwriting standards and large shifts in business models.

Suggested Citation

Balluck, Kushal and Galiay, Artus and Ferrara, Gerardo and Hoggarth, Glenn, The Small Bank Failures of the Early 1990s: Another Story of Boom and Bust (March 18, 2016). Bank of England Quarterly Bulletin 2016 Q1. Available at SSRN: https://ssrn.com/abstract=2759747 or http://dx.doi.org/10.2139/ssrn.2759747

Kushal Balluck (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Artus Galiay

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Gerardo Ferrara

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Glenn Hoggarth

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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