Is free banking more prone to bank failures than regulated banking?
Article Abstract:
Free banking can be an effective alternative to banking reform, since free banking is found to be less prone to bank failures than regulated banking. Hong Kong was more stable with its free trade in banking during 1935 to 1964, than its American counterpart, which was regulated. The bank failure rate in the US was significantly higher than its counterparts in Canada and Hong Kong. While Canada's case with no bank failures during the said period indicates that regulations stabilize the banking system, the higher bank failure rate in the US points out that regulations are not always adequate.
Publication Name: The Cato Journal
Subject: Political science
ISSN: 0273-3072
Year: 1997
User Contributions:
Comment about this article or add new information about this topic:
Payments technologies, financial innovation, and laissez-faire banking
Article Abstract:
The concept of laissez-faire banking is profiting from the latest technologies in credit cards and pre-paid cards. While the trend can replace currency notes, the electronic currency combined with the present financial innovations can result in a stable laissez-faire banking system. Trade transactions will be done through debiting and crediting of liquid wealth and fiat money will continue to be of value as asset money. Further, the accounting system of exchange will coordinate economic activity more efficiently compared to monetary exchanges.
Publication Name: The Cato Journal
Subject: Political science
ISSN: 0273-3072
Year: 1995
User Contributions:
Comment about this article or add new information about this topic:
The performance and stability of banking systems under "self regulation": theory and evidence
Article Abstract:
A study endorses theories regarding the feasibility of deregulation of bank intermediation on the basis of two important provisos. First, the risks that are undertaken should be met by owners and executives, thus protecting the money of depositors and creditors. Second, the reliance on monetary authorities to achieve price-level stability is important for safe and secure banking. In this way, self-regulated banking systems can limit their inside money issues under private market arrangements.
Publication Name: The Cato Journal
Subject: Political science
ISSN: 0273-3072
Year: 1995
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Mis-selling Europe. State failure threatens. Death-throes of a petrostate
- Abstracts: Reverse revenue sharing: a return to fiscal federalism. Cable reregulation. The assault on the First Amendment: public choice and political correctness
- Abstracts: Germany: moving towards a new Ostpolitik? Choices change for Germany. Germany: power at any price
- Abstracts: The politics of fire: Spanish forest policy and ritual resistance in Galicia, Spain. Deliberation in the wilderness: Displacing symbols politics
- Abstracts: Creating perverse incentives. Beyond Mobutu: Kabila and the Congo. Beyond shock therapy