IDEAS home Printed from https://ideas.repec.org/a/oup/cambje/v28y2004i6p903-919.html
   My bibliography  Save this article

Free banking and the stability of early joint-stock banking

Author

Listed:
  • C. R. Hickson
  • J. D. Turner

Abstract

Proponents of free banking argue that systems adopting their policies will be stable. In this paper, we present evidence suggesting that, in general, early joint-stock banking systems did not adopt free banking, and those that did proved to be unstable. In particular, we demonstrate that those systems imposing regulations were generally stable. We rationalise the success of regulation as a pragmatic solution to the time-inconsistency problem arising from the peculiar nature of the banking firm. Notably, we find that the 'golden age' of free banking stability can be attributed to restrictions on the organisational form of the early banking firm. Copyright 2004, Oxford University Press.

Suggested Citation

  • C. R. Hickson & J. D. Turner, 2004. "Free banking and the stability of early joint-stock banking," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(6), pages 903-919, November.
    • Handle: RePEc:oup:cambje:v:28:y:2004:i:6:p:903-919
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/cje/beh036
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ogren, Anders, 2006. "Free or central banking? Liquidity and financial deepening in Sweden, 1834-1913," Explorations in Economic History, Elsevier, vol. 43(1), pages 64-93, January.
    2. Rodríguez Braun, Carlos, 2014. "La banca y las crisis financieras en la literatura popular: Una fortuna peligrosa, de Ken Follett /Banking and Financial Crises in Popular Literature: A Dangerous Fortune, by Ken Follett," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 32, pages 201-222, Enero.
    3. Graeme G. Acheson & John D. Turner, 2011. "Investor behaviour in a nascent capital market: Scottish bank shareholders in the nineteenth century," Economic History Review, Economic History Society, vol. 64(1), pages 188-213, February.
    4. John D. Turner, 2009. "Wider share ownership?: investors in English and Welsh Bank shares in the nineteenth century1," Economic History Review, Economic History Society, vol. 62(s1), pages 167-192, August.
    5. Alexander Fink, 2014. "Free banking as an evolving system: The case of Switzerland reconsidered," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(1), pages 57-69, March.
    6. Seán Kenny & Anders Ögren & Liang Zhao, 2023. "The highs and the lows: bank failures in Sweden through inflation and deflation, 1914–1926," European Review of Economic History, European Historical Economics Society, vol. 27(2), pages 223-249.
    7. Hickson, Charles R. & Turner, John D. & McCann, Claire, 2005. "Much ado about nothing: the limitation of liability and the market for 19th century Irish bank stock," Explorations in Economic History, Elsevier, vol. 42(3), pages 459-476, July.
    8. Thankom Gopinath Arun & John Turner, 2009. "Corporate Governance of Banks in Developing Economies: Concepts and Issues," Chapters, in: Thankom Gopinath Arun & John Turner (ed.), Corporate Governance and Development, chapter 7, Edward Elgar Publishing.
    9. Chris Berg, 2015. "The Curtin-Chifley Origins of the Australian Bank Deposit Guarantee," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 22(1), pages 21-44.
    10. Salter, Alexander W. & Veetil, Vipin & White, Lawrence H., 2017. "Extended shareholder liability as a means to constrain moral hazard in insured banks," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 153-160.
    11. Acheson, Graeme G. & Turner, John D., 2008. "The death blow to unlimited liability in Victorian Britain: The City of Glasgow failure," Explorations in Economic History, Elsevier, vol. 45(3), pages 235-253, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:cambje:v:28:y:2004:i:6:p:903-919. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/cje .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.