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Liquidity and Borrowing from a Lender of Last Resort during the Crisis of 1884

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  • Christopher Hoag

    (Department of Economics, Trinity College)

Abstract

This paper investigates the relation between bank liquidity and borrowing from a lender of last resort on a high frequency basis during a financial crisis. The paper evaluates weekly observations of individual bank borrowing of clearinghouse loan certificates by a panel of New York Clearing House member banks during the crisis of 1884. Naturally, banks with higher reserve ratios borrowed lower amounts, but banks replaced a dollar of reserves with less than a dollar of borrowing from a lender of last resort.

Suggested Citation

  • Christopher Hoag, 2019. "Liquidity and Borrowing from a Lender of Last Resort during the Crisis of 1884," Working Papers 1901, Trinity College, Department of Economics, revised Jul 2019.
    • Handle: RePEc:tri:wpaper:1901
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    File URL: http://www3.trincoll.edu/repec/WorkingPapers2019/WP19-01.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    banking crisis; lender of last resort; clearinghouse; loan certificates.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913

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