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Bank liquidity risk, from John Law (1705) to Walter Bagehot (1873)

dc.contributor.authorde Boyer des Roches, Jérôme
dc.date.accessioned2010-05-11T14:52:55Z
dc.date.available2010-05-11T14:52:55Z
dc.date.issued2009
dc.identifier.urihttps://basepub.dauphine.fr/handle/123456789/4152
dc.language.isoenen
dc.subjectcurrency marketen
dc.subjectmoney marketen
dc.subjectrunen
dc.subjectbank liquidity risken
dc.subjectbank exchange risken
dc.subjectbank credit risken
dc.subjectshareholders’ fundsen
dc.subjectMoney of accounten
dc.subjectcoined moneyen
dc.subjectreal bills doctrineen
dc.subject.ddc330.1en
dc.subject.classificationjelB12en
dc.subject.classificationjelE42en
dc.subject.classificationjelG21en
dc.titleBank liquidity risk, from John Law (1705) to Walter Bagehot (1873)en
dc.typeCommunication / Conférence
dc.description.abstractenBy granting credit and issuing money, banks take a liquidity risk that is to say the risk of being unable to reimburse its notes in coins. Four different explanations of a bank liquidity crisis have been provided by different authors, since John Law and up to Walter Bagehot. First, according to Law (1703) and Steuart (1767), the distinction between money of account (the pound sterling) and money of payment (the guinea) may induce a bank run. Second, according to Cantillon (1730), Hume (1752), Ricardo (1810-1823) and the Currency School (1836-1844), the bank reserve becomes insufficient as a consequence of over issues. Third, according to Smith (1776) and the Banking School (1844-1848), discounting of fictitious bills, by decreasing the shareholders’ funds, leads to banking illiquidity. Lastly, according to Thornton (1802) and Bagehot (1873), the liquidity crisis is a consequence of panics: a “flight” to money for Thornton, a “flight” to credit for Bagehot. The analysis of these four different explanations gives a new light on classical monetary controversies.en
dc.identifier.citationpages19en
dc.description.sponsorshipprivateouien
dc.subject.ddclabelThéorie économiqueen
dc.relation.conftitle2009 Annual Conference of the History of Economics Societyen
dc.relation.confdate2009-06
dc.relation.confcityDenveren
dc.relation.confcountryÉtats-Unisen


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