Racial Violence, Political Representation, and the threat to Banks as Open Access Institutions

40 Pages Posted: 23 Mar 2023 Last revised: 29 Feb 2024

See all articles by Virginia Traweek

Virginia Traweek

Texas Christian University

Malcolm Wardlaw

University of Georgia

Date Written: February 20, 2024

Abstract

Using detailed depositor arrival data from the Freedman's Savings and Trust, we examine how the failure to prevent racial violence impacts bank participation. From 1866 to 1873, we find that events of racial violence perpetrated against Black Americans decrease new account openings at branches in the same region by 23% relative to other branches in the 30 days after the event. Alternatively, events that increased political representation and protections increase the relative arrival of new depositors at the bank by around 50% for the affected branches. We also show that those who opened accounts in the wake of a violent event were less likely to close an account before the bank's eventual failure, suggesting that those who were resistant to the impact of political violence may have tragically been more exposed to other institutional failures.

Keywords: violence, banking participation, minority banking, historical finance

JEL Classification: G51, G53, G41, N11, O16

Suggested Citation

Traweek, Virginia and Wardlaw, Malcolm, Racial Violence, Political Representation, and the threat to Banks as Open Access Institutions (February 20, 2024). Available at SSRN: https://ssrn.com/abstract=4390992 or http://dx.doi.org/10.2139/ssrn.4390992

Virginia Traweek (Contact Author)

Texas Christian University ( email )

Fort Worth, TX 76129
United States

Malcolm Wardlaw

University of Georgia ( email )

Athens, GA 30602-6254
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
51
Abstract Views
387
Rank
720,885
PlumX Metrics