Liquidity creation without a lender of last resort: Clearinghouse loan certificates in the banking panic of 1907

Arbeitspapier

We employ a new data set comprised of disaggregate figures on clearinghouse loan certificate issues in New York City to document how the dominant national banks were crucial providers of temporary liquidity during the Panic of 1907. Clearinghouse loan certificates were essentially bridge loans arranged between clearinghouse members that enabled and were issued in anticipation of monetary gold imports, which took a few weeks to arrive. The large New York City national banks acted as private liquidity providers by requesting (and the New York clearinghouse issuing) a volume of clearinghouse loan certificates beyond their own immediate liquidity needs. While loan certificates were a temporary solution at best to the liquidity crisis in 1907, their issuance allowed the New York banks to serve their role as central reserve city banks in the national banking system.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2006-23b

Classification and Topics

• Classification: Wirtschaft ; Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: U.S.; Canada: Pre-1913 ; Economic History: Financial Markets and Institutions: U.S.; Canada: Pre-1913 ; Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems ; Social Choice; Clubs; Committees; Associations
• Subject: clearinghouse ; financial crisis ; panic ; lender of last resort

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Tallman, Ellis W. ; Moen, Jon R.
• Event: Veröffentlichung
• (who): Federal Reserve Bank of Atlanta
• (where): Atlanta, GA
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/70648
• Last update: 10.03.2025, 11:43 AM CET