Notes

Chapter 1 1. John R. Walter, “The 3-6-3 Rule: An Urban Myth?” Federal Reserve Bank of Rich- mond Economic Quarterly 92, no. 1 (Winter 2006): 51–78.

Chapter 2 1. Gerald P. Dwyer, Jr., “Wildcat Banking, Banking Panics, and Free Banking in the United States,” Federal Reserve Bank of Atlanta Economic Review 81 (December 1996): 1–20. 2. Ibid. 3. Hugh Rockoff, The Free Banking Era: A Reexamination (New York: Arno Press, 1975). 4. Robert G. King, “On the Economics of Private Money,” Journal of Monetary Eco- nomics 12 (July 1983): 127–58. 5. Kevin Dowd, Experience of Free Banking (London and New York: Routledge, 2002). 6. Rockoff, Free Banking Era, 141–67. 7. Dowd, Experience of Free Banking. 8. G. P. Dwyer, Jr., “Wildcat Banking,” 1–20. 9. Rockoff, Free Banking Era, 141–67. 10. Dwyer, Jr., “Wildcat Banking,” 1–20. 11. Ibid. 12. Arthur J. Rolnick and Warren E. Weber, “New Evidence on the Free Banking Era,” The American Economic Review 73, no. 5 (December 1983): 1080–91. 13. Associated Press, “U.S. Never Defaulted on Its Debt? Not So Fast,” Politico, Octo- ber 14, 2013, http://www.politico.com/story/2013/10/debt-limit-government- default-98252.html#ixzz2tXrQuh1n (accessed January 9, 2014). 14. Dowd, Experience of Free Banking. 15. Rockoff, The Free Banking Era, 141–67. 16. Catherine Rampell, “The U.S. Has Defaulted Before,” The New York Times, October 4, 2013, http://economix.blogs.nytimes.com/2013/10/04/the-u-s-has-defaulted- before/ (accessed January 9, 2014). 17. Richard Sylla, John B. Legler, and John J. Wallis, “Banks and State Public Finance in the New Republic: The United States, 1790–1860,” The Journal of Economic History 47, no. 2 (June 1987): 391–403. 218 ● Notes

18. Dowd, Experience of Free Banking. 19. U.S. Department of the Treasury. “Make History: An Interactive Historic Timeline of Events That Shaped the OCC,” Office of the Comptroller of the Currency, U.S. Department of the Treasury, http://www.occ.gov/about/what-we-do/history/interac- tive-exhibit-text-version.html (accessed February 10, 2014). 20. Historic American Buildings Survey, “First National Bank: Photographs, Written, Historical and Descriptive Data,” http://lcweb2.loc.gov/pnp/habshaer/pa/pa0800/ pa0852/data/pa0852data.pdf (accessed January 22, 2014). 21. U.S. Congressional Documents and Debates, 1774–1875 (A Century of Lawmaking for a New Nation), “The Legal Tender Act,” Statutes at Large, 37th Congress, 2nd Session, http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=012/llsl012. db&recNum=0376 (accessed December 1, 2013). 22. In technical terms, sterling silver has a millesimal fineness of 925. 23. U. Michael Bergman, “Do Monetary Unions Make Economic Sense? Evidence from the Scandinavian Currency Union, 1873–1913,” The Scandinavian Journal of Eco- nomics 101, no. 3 (September 1999): 363–77. 24. Encyclopaedia Britannica, 15th ed., s.v. “Bryan, William Jennings.” 25. Until recently, all gold that was ever mined continued to be in circulation. Bullions, orna- ments, and artifacts made of gold would be melted down and made into something else, but the gold would not be wasted. It is only in the last couple of decades that the electron- ics industry has been using gold in quantities too small to be recovered during recycling.

Chapter 3 1. U.S. Bureau of the Census, “Population of the 100 Largest Urban Places: 1900,” Census Bureau, June 15, 1998, https://www.census.gov/population/www/­ documentation/twps0027/tab13.txt (accessed January 15, 2014). 2. Kenneth T. Jackson, ed., The Encyclopedia of New York City (New York: Yale Univer- sity, 1995), 70–71. 3. Eric Dash, “Bank of New York and Mellon Will Merge,” The New York Times, December 5, 2006, http://www.nytimes.com/2006/12/05/business/05bank. html?ei=5088partner= rssnyt&en=d52839b3c880c2ad&ex=1322974800&emc=rs s&pagewanted=all (accessed January 18, 2014). 4. Ben Rooney, “Bank of New York Named in Currency Fraud Suit,” CNN Money, October 5, 2011, http://money.cnn.com/2011/10/05/news/companies/bank_new_ york_mellon_fraud (accessed December 26, 2013). 5. Jackson, Encyclopedia of New York City, 373. 6. Charles P. Kindleberger, “The Formation of Financial Centers: A Study in Com- parative Economic History,” MIT Working Paper no. 114, Department of Eco- nomics, Massachusetts Institute of Technology, Cambridge, MA, August 1973, http://dspace.mit.edu/bitstream/handle/1721.1/63624/formationoffinan00kind. pdf?sequen ce=1. (accessed May 27, 2014). 7. Bodenhorn, Howard. “Bank Chartering and Political Corruption in Antebellum New York. Free Banking as Reform,” in Corruption and Reform: Lessons from Ameri- ca's Economic History, ed. Edward L. Glaeser and Claudia Goldin (Chicago: Univer- sity of Chicago Press, 2006), 231–58. 8. Lawrance Roger Thompson, Young Longfellow (1807–1843) (New York: Macmillan, 1938). Notes ● 219

9. Sylla, Legler, and Wallis, “Banks and State Public Finance,” 391–403. 10. Federal Deposit Insurance Corporation, “The First Fifty Years: A History of the FDIC 1933–1983,” FDIC, 1984, http://www.fdic.gov/bank/ analytical/firstfifty/. (accessed May 27, 2014). 11. Bodenhorn, “Bank Chartering and Political Corruption,” 231–58. 12. Peter R. Eisenstadt and Laura-Eve Moss, eds., The Encyclopedia of New York State (Syracuse, NY: Syracuse University Press, 2005), 373–74. 13. Kindleberger, “The Formation of Financial Centers.” 14. Lansford W. Hastings, The Emigrants’ Guide to Oregon and California. Reproduced in Facsimile from the Original Edition of 1845 (Bedford, MA: Applewood Books, 1994). 15. Karen Clay and Gavin Wright, “Order without Law? Property Rights during the California Gold Rush,” Explorations in Economic History 42 (2005): 155–83. 16. Ibid. 17. Karen Clay and Randall Jones, “Migrating to Riches? Evidence from the California Gold Rush,” Journal of Economic History 68, no. 4 (December 2008): 997–1027. 18. John Philip Wernette, “Branch Banking in California and Bank Failures” The Quar- terly Journal of Economics 46, no. 2 (1932): 362–75. 19. Benjamin Cooper Wright, Banking in California 1849–1910 (San Francisco: H. S. Crocker Company, Printers, 1910). 20. U.S. Mint. “United States Mint at San Francisco,” http://www.usmint.gov/about_ the_mint/mint_facilities/index.cfm?flash=yes&action=SF_facilities (accessed Febru- ary 7, 2014). 21. P. G. and E. Progress, “New Mint Strong as Fortress,” October 1936, reprinted on The Museum of the City of San Francisco website,http://www.sfmuseum.org/hist3/ sfmint.html (accessed February 8, 2014). 22. Internet Archive, “Bank Act of the State of California,” http://archive.org/stream/ bankactofstateof00calirich/bankactofstateof00calirich_djvu.txt (accessed February 3, 2014). 23. Wernette, “Branch Banking in California,” 362–75. 24. Ibid. 25. Wernette, “Branch Banking in California.” 26. Federal Reserve Board, Federal Reserve Bulletin, June, 1920, 423 and 639 (Washing- ton, DC: Government Printing Office, 1920). 27. Federal Reserve Board, Federal Reserve Bulletin, March, 1927, 181–86 (Washington, DC: Government Printing Office, 1927). 28. Wernette, “Branch Banking in California.”

Chapter 4 1. David Mengle, “The Case for Interstate Branch Banking,”FRB Richmond Economic Review 76, no. 6 (November/December 1990): 3–17. 2. Irving Schweiger and John S. McGee, “Chicago Banking,” The Journal of Business 34, no. 3 (1960): 203–366. 3. Howard H. Preston, “The Banking Act of 1935,” Journal of Political Economy 43, no. 6 (1935): 743–62. 4. Ibid. 5. Sam Peltzman, “Entry in Commercial Banking,” Journal of Law and Economics, vol. 8, (1965): 11–50. 220 ● Notes

6. “Banking Act of 1935.” §1816 p. 1004. https://archive.org/details/bankingactheari- 00jrgoog (accessed May 25, 2014). 7. Richard R. Pakonen, “The Differential Effect of Branch Law Regulation on -Com mercial Bank Entry,” PhD diss., Washington State University, 1969. 8. John Goddard, Phil Molyneux, and John O. S. Wilson, “The Profitability of Euro- pean Banks: A Cross‐Sectional and Dynamic Panel Analysis,” The Manchester School 72, no. 3 (2004): 363–81. 9. C. T. Shehzad, Jakob De Haan, and Bert Scholtens, “The Relationship between Size, Growth and Profitability of Commercial Banks,” Applied Economics 45, no. 13 (2013): 1751–65. 10. David C. Motter, “Bank Formation and the Public Interest,” The National Banking Review 2 (March 1965): 299–349. 11. John A. Powers, “Branch versus Unit Banking: Bank Output and Cost Economies,” Southern Economic Journal 36, no. 2 (1969): 153–64. 12. George J. Benston, Gerald A. Hanweck, and David B. Humphrey, “Scale Economies in Banking: A Restructuring and Reassessment,” Journal of Money, Credit and Bank- ing 14, no. 4 (1982): 435–56. 13. Hassan Y. Aly et al., “Technical, Scale, and Allocative Efficiencies in US Banking: An Empirical Investigation,” The Review of Economics and Statistics 72, no. 2 (1990): 211–18. 14. Mark J. Flannery, “The Social Costs of Unit Banking Restrictions,” Journal of Mon- etary Economics 13, no. 2 (March 1984): 237–49. 15. Mengle, “Case for Interstate Branch Banking,” 3–17. 16. Ibid. 17. Michael C. Keeley, “Deposit Insurance, Risk, and Market Power in Banking,” The American Economic Review 80, no. 5 (1990): 1183–200. 18. Douglas D. Evanoff, “Branch Banking and Service Accessibility,” Journal of Money, Credit and Banking 20, no. 2 (1988): 191–202. 19. David A. Alhadeff, Monopoly and Competition in Banking, Berkeley: University of California Press, 1954. 20. Motter, “Bank Formation and the Public Interest,” 299–349. 21. Schweiger and McGee, “Chicago Banking,” 203–366. 22. Franklin R. Edwards, “The Banking Competition Controversy,” The National Bank- ing Review 3 (1965): 1–34. 23. Theodore G. Flechsig,Banking Market Structure and Performance in Metropolitan Areas: A Statistical Study of Factors Affecting Rates on Bank Loans, Federal Reserve System, 1965. 24. Paul M. Horvitz and Bernard Shull, “The Impact of Branch Banking on Bank Per- formance,” The National Banking Review 2 (1964): 143–88. 25. Robert E. Weintraub and Paul F. Jessup, A Study of Selected Banking Services by Bank Size, Structure, and Location (Washington: U.S. Government Printing Office, 1964), 29.

Chapter 5 1. Sveriges Riksbank, “The Riksbank’s Banknote History—Tumba Bruk Museum,” last modified September 30, 2011,http://www.riksbank.se/en/The-Riksbank/History / The- Riksbanks-banknote-history-Tumba-Bruk-museum (accessed December 20, 2013). 2. Sveriges Riksbank, “Towards Central Banking,” last modified September 30, 2011, http://www.riksbank.se/en/The-Riksbank/History/Money-and-power-the-history- of-Sveriges-Riksbank/Towards-central-banking/ (accessed December 20, 2013). Notes ● 221

3. Legislation.gov.uk, “Bank of England Act 1694,” http://www.legislation.gov.uk/aep/ WillandMar/5-6/20/introduction (accessed February 5, 2014). 4. Legislation.gov.uk, “Bank Charter Act 1844,” http://www.legislation.gov.uk/ukpga/ 1844/32/pdfs/ukpga_18440032_en.pdf?view=extent (accessed February 5, 2014). 5. Steve Schifferes, “Financial Crises: Lessons from History,”BBC News, September 3, 2007, http://news.bbc.co.uk/2/hi/business/6958091.stm (accessed October 30, 2013). 6. Banco de España, “From the Banco de San Carlos to the Banco de España,” http://www. bde.es/bde/en/secciones/sobreelbanco/historiabanco/Del_Banco_de_San/ (accessed December 20, 2013). 7. Napoleon would not become the emperor until 1804. 8. Banque de France, “1800 Creation of the Banque de France,” https://www.banque- france.fr/en/banque-de-france/history/the-milestones/1800-creation-of-the- banque-de-france.html (accessed December 20, 2013). 9. Banque de France, “1808–1936 Extension of the Right of Note Issue Development of the Branch Network and Diversification,”https://www.banque-france.fr/en/banque-de-france/ history/the-milestones/1808-1936-extension-of-the-right-of-note-issue-­development-of- the-branch-network-and-diversification.html (accessed December 20, 2013). 10. Danmarks Nationalbank, “Historical Snapshots,” http://www.nationalbanken.dk/ dnuk/hist.nsf/Hist!readForm (accessed December 20, 2013). 11. Federal Reserve Bank of Philadelphia, “The First Bank of the United States: A Chapter in the History of Central Banking,” last modified June 2009, http://www.philadelphiafed. org/publications/economic-education/first-bank.pdf (accessed December 20, 2013). 12. Federal Reserve Bank of New York, “The Founding of the Fed,” http://www.­ newyorkfed.org/aboutthefed/history_article.html#top (accessed December 20, 2013). 13. John S. Jenkins, Life and Public Services of General Andrew Jackson (New York and Auburn: Miller, Orton and Mulligan, 1855), 248. 14. Membership at the private club was limited to the wealthiest families at the time, including the Rockefellers and Vanderbilts. Together, these member families wielded an outsized influence on American economy and politics. 15. Chad R. Wilkerson, “Senator Robert Owen of Oklahoma and the Federal Reserve’s Formative Years,” Federal Reserve Bank of Kansas City Economic Review 3 (2013): 5–27. 16. Board of Governors of the Federal Reserve System, “Federal Reserve Act,” last modified August 16, 2013, http://www.federalreserve.gov/aboutthefed/fract.htm (accessed December 20, 2013). 17. Ibid. 18. Ibid. 19. U.S. Bureau of Engraving and Printing, “BEP History,” last modified 2004, http:// www.moneyfactory.gov/images/BEP_History_Sec508_web.pdf (accessed December 20, 2013). 20. Board of Governors of the Federal Reserve System, “Section 16. Note Issues,” last modified May 23, 2013,http://www.federalreserve.gov/aboutthefed/section16.htm (accessed December 20, 2013). 21. The American Presidency Project, “Executive Order 6102,” http://www.presidency. ucsb.edu/ws/?pid=14611 (accessed December 11, 2013). 22. Liaquat Ahamed, Lords of Finance: The Bankers Who Broke the World (London: Pen- guin Books, 2009), 474. 23. Board of Governors of the Federal Reserve System, “Federal Reserve Act,” last modified August 16, 2013, http://www.federalreserve.gov/aboutthefed/fract.htm (accessed December 20, 2013). 222 ● Notes

24. Board of Governors of the Federal Reserve System, “Mission,” last modifiedN ­ ovember 6, 2009, http://www.federalreserve.gov/aboutthefed/mission.htm (accessed ­December 20, 2013). 25. Board of Governors of the Federal Reserve System, “Federal Open Market Commit- tee,” last modified February 3, 2014,http://www.federalreserve.gov/monetarypolicy/ fomc.htm (accessed February 17, 2014). 26. Board of Governors of the Federal Reserve System, “Administration of Relationships with Primary Dealers,” last modified January 11, 2010, http://www.newyorkfed.org/ markets/pridealers_ policies.html (accessed December 20, 2014). 27. R. Burgess, “Reflections on the Early Development of Open Market Policy,”Monthly Review, Federal Reserve Bank of New York (1964). 28. Robert L. Hetzel and Ralph F. Leach, “After the Accord: Reminiscences on the Birth of the Modern Fed,” Federal Reserve Bank of Richmond Economic Quarterly 87, no. 1 (Winter 2001): 57–64. 29. Frederic S. Mishkin, Economics of Money, Banking, and Financial Markets, 10th ed. (New York: Pearson, 2013), 385–86. 30. Tomáš Sivák, “Inflation Targeting vs. Nominal GDP Targeting,”Macroeconomic Issues 21, no. 3 (2013): 5–11. 31. George A. Kahn, “Beyond Inflation Targeting: Should Central Banks Target the Price Level?” Federal Reserve Bank of Kansas City Economic Quarterly 3 (2009): 35–64. 32. Carl E. Walsh, “The New Output-Inflation Trade-off,”FRBSF Economic Letter 4 (1998): 98–104. 33. Marvin Goodfriend, “Interest Rates and the Conduct of Monetary Policy,” in Carnegie-­ Rochester Conference Series on Public Policy, vol. 34 (Amsterdam: North-Holland, 1991), 7–30. 34. Flint Brayton et al., “The Evolution of Macro Models at the Federal Reserve Board,” in Carnegie-Rochester Conference Series on Public Policy, vol. 47 (Amsterdam: North- Holland, 1997), 43–81. 35. Berner, Richard, et al., “A Multi-Country Model of the International Influences on the US Economy: Preliminary Results” International Finance Discussion Papers, no. 115, Board of Governors of the Federal Reserve System, 1977. 36. Ibid. 37. Charles T. Carlstrom and Timothy S. Fuerst, “The Taylor Rule: A Guidepost for Monetary Policy?” Federal Reserve Bank of Cleveland (July 2003): 1–4. 38. Brayton et al., “Evolution of Macro Models,” 43–81.

Chapter 6 1. Paul Poast, The Economics of War (New York: McGraw-Hill/Irwin, 2006), 55. 2. Aaron M. Sakolski, Principles of Investment (New York: Arno, 1975), 158. 3. Homesteading was discontinued in 1976, except in Alaska, where it was permitted until 1986. 4. Benjamin S. Bernanke, “Money, Gold, and the Great Depression,” remarks at the H. Parker Willis Lecture in Economic Policy, Washington and Lee University, Lex- ington, VA, March 2, 2004. 5. Benjamin S. Bernanke, “On Milton Friedman’s Ninetieth Birthday,” remarks at the Conference to Honor Milton Friedman, University of Chicago, Chicago, IL, November 8, 2002. 6. “The Banking Act of 1933,” https://archive.org/details/FullTextTheGlass- steagallActA.k.a.TheBankingActOf1933 (accessed May 29, 2014). Notes ● 223

7. Ibid. 8. Jonathan R. Macey, “Special Interest Groups Legislation and the Judicial Function: The Dilemma of Glass-Steagall,” Faculty Scholarship Series, Paper 1766, Yale Law School, Yale University, New Haven, CT, 1984. http://digitalcommons.law.yale. edu/ fss_papers/1766. (accessed May 25, 2014). 9. Carter H. Golembe, “The Deposit Insurance Legislation of 1933: An Examina- tion of Its Antecedents and Its Purposes,” Political Science Quarterly 75, no. 2 (June 1960): 181–200. 10. Alton R. Gilbert, “Requiem for Regulation Q: What It Did and Why It Passed Away,” Federal Reserve Bank of St. Louis Review 68, no. 2 (February 1986): 22–37. 11. Jonathan R. Macey and Geoffrey P. Miller, “Double Liability of Bank Sharehold- ers: History and Implications,” Faculty Scholarship Series, Paper 1642, Yale Law School, Yale University, New Haven, CT, 1992. http://digitalcommons.law.yale.edu/ fss_papers/1642. (accessed May 25, 2014). 12. “The Banking Act of 1933”https://archive.org/details/FullTextTheGlass- steagallActA.k.a.TheBankingActOf1933 (accessed May 29, 2014). 13. Frederick A. Bradford, “The Banking Act of 1935,”The American Economic Review 25, no. 4 (December 1935): 661–72. 14. Clifford F. Thies, “The First Minimum Wage Laws,”Cato Journal 10, no. 3 (Winter 1991): 715–46. 15. White House Office of Management and Budget, “Historical Tables,” http://www. whitehouse.gov/omb/budget/historical (accessed January 5, 2014). 16. Christina D. Romer, “The Hope That Flows from History,” The New York Times, August 13, 2011. http://www.nytimes.com/2011/08/14/business/economy/from- world-war-ii-economic-lessons-for-today.html (accessed January 27, 2014). 17. Christina D. Romer, “What Ended the Great Depression?” The Journal of Economic History 52, no. 4 (December 1992): 757–84.

Chapter 7 1. Ruggie, John Gerard. “International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order,” International Organization 36, no. 2 (1982): 379–415. 2. Michael Lewis, Liar’s Poker (New York: W. W. Norton and Company, 2010), 105. 3. Robert DeYoung and Tara Rice, “How Do Banks Make Money? The Fallacies of Fee Income,” Federal Reserve Bank of Chicago Economic Perspectives 4Q (2004): 34–51. 4. Walter, “The 3-6-3 Rule: An Urban Myth?” 51–78. 5. Russell Mokhiber, “How to Put Bankers Back on the Golf Course, Where They’ll Do Less Harm,” CounterPunch, May 5, 2010. http://www.counterpunch. org/2010/05/05/how-to-put-bankers-back-on-the-golf-course-where-they-ll-do- less-harm/ (accessed January 8, 2014). 6. Committee on Banking and Currency, House of Representatives, 85th Congress, Bank Holding Company Act of 1956 (Washington: United States Government Print- ing Office, 1968). 7. Ibid. 8. Federal Deposit Insurance Corporation, “Important Banking Laws,” last modified December 2, 2013, http://www.fdic.gov/regulations/laws/important/index.html (accessed December 3, 2013). 224 ● Notes

9. Financial Crimes Enforcement Network, United States Department of the Treasury, “Bank Secrecy Act,” http://www.fincen.gov/statutes_regs/bsa/ (accessed February 9, 2014). 10. Federal Trade Commission, “The Fair Credit Reporting Act,”http://www.ftc.gov/ sites/default/files/fcra.pdf (accessed February 9, 2014). 11. Alonzo L. Hamby, “The Vital Center, the Fair Deal, and the Quest for a Liberal Political Economy,” The American Historical Review 77, no. 3 (1972): 653–78. 12. U.S. Department of Labor Wage and Hour Division, “History of Federal Minimum Wage Rates under the Fair Labor Standards Act, 1938–2009,” http://www.dol.gov/ whd/minwage/chart.htm (accessed January 15, 2014). 13. Nebraska Department of Roads, “The Interstate in Nebraska,”http://www. ­transportation. nebraska.gov/i-80-anniv/index.htm (accessed February 10, 2014). 14. U.S. Department of Transportation, Federal Highway Administration, “Highway Statistics 2011,” http://www.fhwa.dot.gov/policyinformation/statistics/2011/vm1. cfm. (accessed February 10, 2014). 15. Office of Management and Budget, “Table 1.2—Summary of Receipts, Outlays, and Surpluses or Deficits (-) as Percentages of GDP: 1930–2018,”http://www.white - house.gov/omb/budget/historical (accessed February 5, 2014). 16. Oswald Johnston, “Big Trade Deficit Turns U.S. into Debtor Nation : First Time Since 1914; Situation Threatens to Cut Investment Profits, Worsen Economic Prob- lems,” Los Angeles Times, September 17, 1985, http://articles.latimes.com/1985-09- 17/news/mn-20088_1_debtor-nation (accessed February 3, 2014). 17. Max Fisher, “This Surprising Chart Shows Which Countries Own the Most U.S. Debt,” The Washington Post, October 10, 2013, http://www.washingtonpost.com/ blogs/worldviews/wp/2013/10/10/this-surprising-chart-shows-which-countries- own-the-most-u-s-debt/ (accessed February 3, 2014). 18. Paul D. Poast, “How Did the Bretton Woods System Work and How Did It End?” unpublished mimeo, The Ohio State University, 2002. 19. U.S. Bureau of the Census, “U.S. Trade in Goods and Services—Balance of Payments (BOP) Basis,” last modified February 6, 2014,http://www.census.gov/foreign-trade/ statistics/historical/gands.pdf (accessed February 7, 2014).

Chapter 8 1. Steven J. Pilloff and Robin A. Prager, “Thrift Involvement in Commercial and Industrial Lending,” Federal Reserve Bulletin 84 (1998): 1025–37. 2. Encyclopaedia Britannica, 11th ed., vol. XXIV (Cambridge, England: University Press, 1911), 243–48. 3. “The History of the German Savings Banks,”http://www.esbg.eu/template/content. aspx?id=5116 (accessed May 29, 2014). 4. Bernardo Batiz-Lazo, “Strategic Alliances and Competitive Edge: Insights from Spanish and UK Banking Histories,” Economic History 46, no. 1 (2002): 23–56. 5. Building Societies Association, “The History of Building Societies,” last modified April 15, 2013, http://www.bsa.org.uk/consumers/general/general-consumer-fact- sheets/the-history-of-building-societies/ (accessed February 1, 2014). 6. In some cases, the mail service even had its own train lines. The Post Office Railway, or the Mail Rail, is a 6.5-mile-long train system under London’s streets between Paddington and Whitechapel that was used to move mail between sorting offices. The underground rail opened in 1927 and service stopped only in 2003. The British Postal Museum is now planning to open part of the route to the public. Notes ● 225

7. The Two Penny Blue, to be used on heavier letters, was issued just a few days later. Fewer Two Penny Blues were printed; consequently they are much rarer today. 8. Christine Seib, “Deutsche Bank Makes £2.2bn U-turn to Buy Stake in Postbank,” The Times, September 13, 2008, http://business.timesonline.co.uk/tol/business/ industry_sectors/banking_and_finance/article4744353.ece (accessed February 10, 2014). 9. U.S. Postal Service, “Postal Savings System,” last modified July, 2008,http://about. usps.com/who-we-are/postal-history/postal-savings-system.pdf (accessedJanuary 30, 2014). 10. Savage’s son-in-law William Barton Rogers, a physicist and educator, is remembered for establishing the Massachusetts Institute of Technology in 1861. 11. George S. Hillard and Emma Rogers, Memoir of the Hon. James Savage, LL.D., Late President of the Massachusetts Historical Society (Boston: John Wilson and Son, 1878), 16. 12. James M. Willcox, A History of the Philadelphia Savings Fund Society: 1816–1916 (Philadelphia: J. B. Lippincott Company, 1916), 27. 13. Inga Saffron, “Changing Skyline: A Mural for PSFS? No Need to Cover up a Clas- sic.” Philly.com, October 20, 2012, http://articles.philly.com/2012-10-20/entertain- ment/34585420_1_william-lescaze-psfs-mural-arts-month (accessed January 25, 2014). 14. Rose M. Kushmeider, “The U.S. Federal Financial Regulatory System: Restructuring Federal Bank Regulation,” Federal Deposit Insurance Corporation Banking Review, last modified January 19, 2006, http://www.fdic.gov/bank/analytical/banking/2006jan/ article1/index.html (accessed January 15, 2014). 15. Cyd McKenna, “The Homeownership Gap: How the Post-World War II GI Bill Shaped Modern Day Homeownership Patterns for Black and White Americans,” master’s thesis, MIT, 2008. 16. Harry S. Truman, “Annual Message to the Congress on the State of the Union,” January 5, 1949, online by Gerhard Peters and John T. Woolley, The American Presi- dency Project, http://www.presidency.ucsb.edu/ws/?pid=13293 (accessed January 12, 2014). 17. Kenneth T. Jackson, Crabgrass Frontier: The Suburbanization of the United States (New York: Oxford University Press, 1985), 209. 18. U.S. Bureau of the Census, “Residential Vacancies and Homeownership in the Fourth Quarter 2013,” last modified January 31, 2014,http://www.census.gov/ housing/hvs/files/currenthvspress.pdf (accessed February 5, 2014). 19. Kate Pickert, “A Brief History of Fannie Mae and Freddie Mac,” Time, July 14, 2008, http://content.time.com/time/business/article/0,8599,1822766,00.html (accessed February 5, 2014). 20. The real risk-free interest rate is the opportunity cost of foregoing consumption (i.e., the rate that must be offered to individuals to persuade them to save rather than con- sume). The expected inflation rate over the term of the instrument is also something that the lender needs to be compensated for. The Fisher Hypothesis hence says that the interest rate on short-term risk-free securities is given by the sum of the real risk-free interest rate and the expected inflation rate over the term of the instrument. As the inflation rate goes up, the interest rate that has to be offered also goes up accordingly. 21. Federal Deposit Insurance Corporation, “The S&L Crisis: A Chrono-Bibliography,” last modified December 20, 2002,http://www.fdic.gov/bank/historical /s%26l/ (accessed January 10, 2014). 22. John P. Bartholomay, “The Southwest Plan and FIRREA: What Have We Learned?” Annual Review of Banking Law 9 (1990): 501–31. 226 ● Notes

23. Securities and Exchange Commission, “SEC Proposes Roadmap toward Global Accounting Standards to Help Investors Compare Financial Information More Easily,” http://www.sec.gov/news/press/2008/2008-184.htm (accessed January 18, 2014). 24. Kathleen Day, S & L Hell: The People and the Politics behind the $1 Trillion Savings and Loan Scandal (New York: W. W. Norton and Company, 1993), 150. 25. Dan Walters, “California GOP Tied in with S and L Affair: Scandal: Legislature Should Follow Washington and Investigate Roles of California Officials in Thrift’s Demise,” Los Angeles Times, November 17, 1989, http://articles.latimes.com/1989- 11-17/local/me-1552_1_california-legislature (accessed January 25, 2014). 26. Bartholomay, “Southwest Plan and FIRREA,” 501–31. 27. “Home State Savings Bank’s Failure,” http://www.ohiohistorycentral.org/w/Home_ State_Savings_Bank’s_Failure?rec=1636 (accessed January 30, 2014). 28. Federal Deposit Insurance Corporation, “Anecdotal Stories,” http://www.fdic.gov/ bank/historical/managing/Chron/anecdotes.pdf (accessed February 1, 2014). 29. Ibid. 30. U.S. Commission on Civil Rights, “Office of Thrift Supervision Regional Offices,” http://www.usccr.gov/pubs/uncsam/agency/thrift.htm (accessed February 2, 2014). 31. The FDIC’s funds for providing deposit insurance to commercial banks come from its Bank Insurance Fund (BIF). 32. Seidman’s outspokenness on the financial crisis rankled some in the George H. W. Bush administration, which tried to force him from the chairmanship when he still had eighteen months left to go. But with the help of his friends from both sides of the aisle in the Capitol, he served out the remainder of his term and successfully prevented the implementation of a proposal to merge the deposit insurance program with the Department of the Treasury. 33. Peter S. Goodman, “L. William Seidman, Who Led F.D.I.C. During Savings and Loan Crisis, Dies at 88,” The New York Times, May 13, 2009, http://www.nytimes. com/2009/05/14/business/14seidman.html?pagewanted=all (accessed January 22, 2014). 34. Timothy Curry and Lynn Shibut, “The Cost of the Savings and Loan Crisis: Truth and Consequences,” FDIC Banking Review 13, no. 2 (2000): 26–35. 35. “Financial Market Regulation,” Government Accountability Office, Report No. GAO-07-154, March 2007: 72–5. 36. Edmund L. Andrews, Michael J. de la Merced, and Mary W. Walsh, “Fed’s $85 Bil- lion Loan Rescues Insurer,” The New York Times, September 16, 2008, http://www. nytimes.com/2008/09/17/business/17insure.html?_r=0andhp=andpagewante=all (accessed January 12, 2014). 37. Andrea Shalal-Esa, “FACTBOX: Top Ten U.S. Bank Failures,” Reuters, Septem- ber 25, 2008, http://www.reuters.com/article/2008/09/26/us-washingtonmutual-­ jpmorgan-failures-fa-idUSTRE48P0YC20080926 (accessed November 24, 2013). 38. “IndyMac Allowed to Backdate Capital,” Financial Times, December 24, 2008, http://www.ft.com/cms/s/0/224b7196-d15c-11dd-8cc3-000077b07658. html#axzz32vrwjBlV (accessed January 30, 2014). 39. This was the second time Dochow was removed from a senior supervisory position. He had been demoted because of improprieties in the early nineties. 40. Binyamin Appelbaum and Ellen Nakashima, “Regulator Let IndyMac Bank Falsify Report,” Washington Post, December 23, 2008, http://www.washingtonpost.com/wp-dyn/ content/article/2008/12/22/AR2008122201301_pf.html (accessed January 5, 2014). Notes ● 227

41. Associated Press, “Scott Polakoff, Top Bank Regulator, Placed on Leave Pending Probe of Backdated Cash Infusions for IndyMac,” The Huffington Post, March 27, 2009, http://www.huffingtonpost.com/2009/03/27/scott-polakoff-top-bank- r_n_179828.html (accessed January 18, 2014).

Chapter 9 1. Forbes, “H. Ross Perot, Sr.,” http://www.forbes.com/profile/h-ross-perot-sr/ (accessed February 13, 2014). 2. He also ran as the Reform Party candidate in 1996 but only managed 8.4 percent of the vote. 3. FRED Economic Data, “Graph: Federal Debt: Total Public Debt as Percent of Gross Domestic Product (GFDEGDQ188S),” http://research.stlouisfed.org/fred2/ graph/?id=GFDEGDQ188S (accessed December 15, 2013). 4. Steven Greenhouse, “Clinton’s Economic Plan: Impact on Individuals; Middle Class and Wealthy to Bear Brunt of New Taxes,” The New York Times, February 18, 1993, http://www.nytimes.com/1993/02/18/us/clinton-s-economic-plan-impact-­ individuals-middle-class-wealthy-bear-brunt-new.html (accessed February 6, 2014). 5. Internal Revenue Service, “Corporation Income Tax Brackets and Rates, 1909– 2002,” http://www.irs.gov/pub/irs-soi/02corate.pdf (accessed November 12, 2013). 6. University of California Berkeley Regional Oral History Office (ROHO), “1993 Omnibus Budget Reconciliation Act,” http://bancroft.berkeley.edu/ROHO/proj- ects/debt/1993reconciliationact.html (accessed December 28, 2013). 7. Ibid. 8. U.S. National Archives, “The Clinton-Gore Administration: A Record ofP ­ rogress,” http://clinton5.nara.gov/WH/Accomplishments/eightyears-03.html (accessed J­anuary 19, 2014). 9. U.S. Department of Health and Human Services, “Connecting Kids to Coverage: Continuing the Progress,” http://www.insurekidsnow.gov/professionals/reports/ chipra/2010_annual.pdf (accessed February 10, 2014). 10. U.S. National Archives, “The Clinton-Gore Administration.” 11. Victor Aguirregabiria, Robert Clark, and Hui Wang, “Bank Expansion after the Riegle-Neal Act: The Role of Diversification of Geographic Risk,” University of Toronto Working Paper (2010), http://www.economicdynamics.org/meetpa- pers/2010/paper_485.pdf (accessed January 28, 2014). 12. Kathy Cobb, David S. Dahl, and David Fettig, “Interstate Branch Banking: Opt in or Opt Out?” Fedgazette, last modified January 1, 1995, http://www.minneapolisfed. org/publications_papers/pub_display.cfm?id=2759 (accessed January 17, 2014). 13. Ibid. 14. Norwest acquired Wells Fargo in 1998 but decided to operate under the name Wells Fargo as it was more well known. 15. Bill Medley, “Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994,” ­Federal Reserve History, last modified November 22, 2013, http://www.­ federalreservehistory.org/Events/DetailView/50 (accessed January 29, 2014). 16. Medley, “Riegle-Neal Act.” 17. Aguirregabiria, Clark, and Wang, “Bank Expansion after the Riegle-Neal Act,” 1–5. 18. GovTrack, “S. 900 (106th): Gramm-Leach-Bliley Act (On Passage of the Bill),” https://www.govtrack.us/congress/votes/106-1999/s105 (accessed October 5, 2013). 19. Ibid. 228 ● Notes

20. Securities and Exchange Commission, “Commodity Futures Modernization Act of 2000,” https://www.sec.gov/about/laws/cfma.pdf (accessed January 11, 2014). 21. The act also created the National Futures Association (NFA), an independent agency headquartered in Chicago. The goal of the NFA was to protect investors from fraud- ulent commodity and futures trading activities. 22. Securities and Exchange Commission, “Commodity Futures Modernization Act.” 23. International Swaps and Derivatives Association, “Memorandum for ISDA Members: Commodity Futures Modernization Act of 2000,” last modified January 5, 2001, http://www.isda.org/speeches/pdf/analysis_of_commodity-exchange-act-­legislation. pdf (accessed January 11, 2014). 24. Mark Jickling, “The Enron Loophole,” Congressional Research Service Report for Con- gress, last modified July 7, 2008, http://assets.opencrs.com/rpts/RS22912_20080707. pdf (accessed February 2, 2014). 25. Grace Livingstone, “The Real Hunger Games: How Banks Gamble on Food Prices— and the Poor Lose Out,” The Independent, April 1, 2012, http://www.independent. co.uk/news/world/politics/the-real-hunger-games-how-banks-gamble-on-food- prices--and-the-poor-lose-out-7606263.html (accessed January 19, 2014). 26. Ibid. 27. Yahoo! Finance, “NASDAQ Composite Historical Prices,” http://finance.yahoo. com/q/hp?s=%5EIXICanda=02andb=1andc=2000andd=02ande=31andf=2000and g=d (accessed February 5, 2014). 28. Board of Governors of the Federal Reserve System, “Open Market Operations Archive,” last modified November 15, 2013, http://www.federalreserve.gov/­ monetarypolicy/openmarket_archive.htm/ (accessed November 30, 2013). 29. The only other times the NYSE remained closed for a longer duration were during the First World War, when it did not open for almost four months in 1914, and for just over a week during the Great Depression in 1933. 30. Gail Maniken, “The Economic Effects of 9/11: A Retrospective Assessment,”Con - gressional Research Service Report for Congress, last modified September 27, 2002, http://www.fas.org/irp/crs/RL31617.pdf (accessed December 10, 2013). 31. Board of Governors of the Federal Reserve System, “Press Release,” last ­modified ­ September 11, 2001, http://www.federalreserve.gov/Boarddocs/press/­ general/2001/20010911/default.htm (accessed January 9, 2014). 32. Roger W. Ferguson, “September 11, the Federal Reserve, and the Financial Sys- tem,” last modified February 5, 2003, http://www.federalreserve.gov/boarddocs/ speeches/2003/20030205/default.htm (accessed February 1, 2014). 33. Ibid. 34. R. Glenn Hubbard, Bruce Deal, and Peter Hess, “The Economic Effects of Federal Participation in Terrorism Risk,” Risk Management and Insurance Review 8, no. 2 (2005): 177–209. 35. Laurence Zuckerman, “A Day of Terror: The Airlines; for the First Time, the Nation’s Entire Airspace Is Shut Down,” The New York Times, September 12, 2001, http:// www.nytimes.com/2001/09/12/us/day-terror-airlines-for-first-time-nation-s-entire- airspace-shut-down.html (accessed February 9, 2014). 36. Shan Carter and Amanda Cox, “One 9/11 Tally: $3.3 Trillion,” The New York Times, September 8, 2011, http://www.nytimes.com/interactive/2011/09/08/us/sept- 11-reckoning/cost-graphic.html?_r=0 (accessed December 14, 2013). 37. D. Mark Wilson and William W. Beach, “The Economic Impact of President Bush’s Tax Relief Plan,” The Heritage Foundation, last modified April 27, 2001, http:// Notes ● 229

origin.heritage.org/research/reports/2001/04/the-economic-impact-of-president- bushs-tax-relief-plan (accessed January 17, 2013). 38. Chris Edwards, “Tax Policy under President Bush,” CATO Institute, last modified August 14, 2006, http://www.cato.org/publications/commentary/tax-policy-under- president-bush (accessed January 25, 2013). 39. Congressional Budget Office, “Changes in CBO’s Baseline Projections Since Janu- ary 2001,” last modified June 7, 2012, http://www.cbo.gov/sites/default/files/cbo- files/attachments/06-07-ChangesSince2001Baseline.pdf (accessed November 7, 2013). 40. The Wall Street Journal, “The Bush Economy,” Opinion, The Wall Street Journal, January 17, 2009, http://online.wsj.com/news/articles/SB123215327787492291 (accessed January 4, 2014). 41. British Broadcasting Corporation, “Q and A: The Enron Case,”BBC News, July 5, 2006, http://news.bbc.co.uk/2/hi/business/3398913.stm (accessed January 8, 2014). 42. Arthur Andersen, Deloitte, PricewaterhouseCoopers, Ernst & Young, and KPMG used to form the Big Five. The latter four are now referred to as the “Big Four.” 43. Shaheen Pasha and Jessica Seid, “Lay and Skilling’s Day of Reckoning,” CNN Money, May 25, 2006, http://money.cnn.com/2006/05/25/news/newsmakers/enron_ver- dict/index.htm (accessed January 8, 2014). 44. “Close the Enron Loophole Act” https://www.govtrack.us/congress/bills/110/s2058 (accessed February 22, 2014). 45. Ibid. 46. Democracy Now! “Rep. Marcy Kaptur (D-OH) Urges Homeowners to Stay in Foreclosed Homes,” last modified February 3, 2009, http://www.democracynow. org/2009/2/3/rep_marcy_kaptur_d_oh_urges (accessed January 10, 2014). 47. Ibid. 48. Charles I. Jones, The Global Financial Crisis of 2007–20?? A Supplement to Macroeco- nomics (New York: W. W. Norton, 2009). 49. Benjamin S. Bernanke, “The Global Savings Glut and the U.S. Current Account Deficit,” last modified March 10, 2005, http://www.federalreserve.gov/boarddocs/ speeches/2005/200503102/ (accessed January 7, 2014). 50. Krishna Guha, “A Global Outlook,” Financial Times, September 17, 2007, http://www.ft.com/intl/cms/s/0/976b7442-6486-11dc-90ea-0000779fd2ac. html#axzz2sC8YQCw7 (accessed February 1, 2014). 51. Ibid. 52. The Wall Street Journal, “The Bush Economy.” 53. Seth Jayson, “Homebuilders Get Comical,” The Motley Fool, September 7, 2006, http://www.fool.com/personal-finance/home/2006/09/07/homebuilders-get-­ comical.aspx (accessed January 16, 2014). 54. The Economist, “CSI: Credit Crunch.” Special Report, October 18, 2007, http:// www.economist.com/node/9972489 (accessed February 14, 2014). 55. McGraw Hill Financial, “Gamma,” http://www.standardandpoors.com/products- services/gamma/en/us (accessed January 21, 2014). 56. Richard Sylla, “An Historical Primer on the Business of Credit Rating,” in Rat- ings, Rating Agencies and the Global Financial System, Levich, Richard M., Giovanni Majnoni, and Carmen Reinhart, eds. (Springer US, 2002), 19–40. 57. Warwick J. McKibbin and Andrew Stoeckel, “The Global Financial Crisis: Causes and Consequences,” Asian Economic Papers 9, no. 1 (2010): 54–86. 230 ● Notes

58. Andrew R. Sorkin, “JP Morgan Pays $2 a Share for Bear Stearns,” The New York Times, March 17, 2008, http://www.nytimes.com/2008/03/17/business/17bear. html?pagewanted=all (accessed January 2, 2014). 59. “U.S. Takes Control of Fannie Mae and Freddie Mac,” The New York Times, Septem- ber 7, 2008, http://www.nytimes.com/2008/09/07/business/worldbusiness/07iht- treasury.4.15955496.html?pagewanted=all&_r=0 (accessed March 3, 2014). 60. Stephen Labaton, “Agency’s ’04 Rule Let Banks Pile Up New Debt,” The New York Times, October 2, 2008, http://www.nytimes.com/2008/10/03/business/03sec. html?em=andpagewanted=all (accessed January 5, 2014). 61. “Press Release,” Board of Governors of the Federal Reserve System, September 16, 2008, http://www.federalreserve.gov/newsevents/press/other/20080916a.htm (accessed December 20, 2013). 62. Julie H. Davis, “Bailout Bill Slapped Aside; Record Stock Plunge,” Associated Press, September 29, 2008, http://web.archive.org/web/20081003021448/http://news. yahoo.com/s/ap/20080929/ap_on_bi_ge/financial_meltdown (accessed January 30, 2014). 63. Peter G. Gosselin, “Paulson Will Have No Peer,” Los Angeles Times, September 29, 2008, http://articles.latimes.com/2008/sep/29/business/fi-assess29 (accessed J­anuary 1, 2014). 64. U.S. Department of the Treasury, “Troubled Asset Relief Program (TARP) Monthly Report to Congress—December 2012,” last modified January 10, 2013, http:// www.treasury.gov/initiatives/financial-stability/reports/Documents/December%20 2012%20Monthly%20Report%20to%20Congress.pdf (accessed January 5, 2014). 65. Ryan Tracy and Michael R. Crettenden, “Some Small Banks Still Owe TARP Money,” The Wall Street Journal, September 25, 2013, http://online.wsj.com/news/ articles/SB10001424052702303983904579091101339020342 (accessed January 31, 2014). 66. “American Recovery and Reinvestment Act,” http://www.gpo.gov/fdsys/pkg/BILLS- 111hr1enr/pdf/BILLS-111hr1enr.pdf (accessed February 10, 2014). 67. Council of Economic Advisers, “The Economic Impact of the American Recovery and Reinvestment Act of 2009,” last modified December 9, 2011, http://www.white- house.gov/sites/default/files/cea_8th_arra_report_final_draft.pdf (accessed February 10, 2014). 68. A much more detailed breakdown of the expenditure can be tracked on a website set up by the federal government (http://www.recovery.gov). 69. Benjamin S. Bernanke, “Monetary Policy and the Housing Bubble,” last modified­ ­January 3, 2010, http://www.federalreserve.gov/newsevents/speech/­bernanke201001 03a.htm (accessed January 16, 2014). 70. The Economist, “CSI: Credit Crunch.”

Chapter 10 1. Financial intermediaries are businesses that specialize in borrowing funds from peo- ple who have saved and lending to people who want to borrow. These refer to indi- rect financing. Financial markets, on the other hand, refer to direct financing. These are markets in which funds are transferred from people who have a surplus of it (savers) to people who have a shortage (borrowers). Examples are securities markets like the stock market and the bond market. Notes ● 231

2. GovTrack, “H. R. 4173 (111th): Dodd-Frank Wall Street Reform and Consumer Protection Act,” last modified July 15, 2010, https://www.govtrack.us/congress/bills /111/hr4173/text (accessed January 5. 2014). 3. House.gov, “Final Vote Results for Roll Call 968,” last modified December 11, 2009, http://clerk.house.gov/evs/2009/roll968.xml (accessed January 5, 2014). 4. Senate.gov, “Roll Call Votes 111th Congress—2nd Session,” last modified May 20, 2010, http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm? congress=111andsession=2andvote=00162 (accessed January 5, 2014). 5. The New York Times, “House Vote 413—Final Approval for Financial Regulations,” The New York Times, June 30, 2010. http://politics.nytimes.com/congress/votes/111/ house/2/413 (accessed January 14, 2014). 6. The New York Times, “Senate Vote 206—Final Senate Hurdle for Financial Regula- tion Bill,” The New York Times, July 15, 2010. http://politics.nytimes.com/congress/ votes/111/senate/ 2/206?ref=business (accessed January 14, 2014). 7. White House, “President Obama to Announce Comprehensive Plan for Regula- tory Reform,” last modified June 17, 2009,http://www.whitehouse.gov/the-press- office/president-obama-announce-comprehensive-plan-regulatory-reform (accessed ­January 7, 2014). 8. The Wall Street Journal, “Obama’s Financial Reform Plan: The Condensed Version,” The Wall Street Journal, June 17, 2009, http://blogs.wsj.com/washwire/2009/06/17/ obamas-financial-reform-plan-the-condensed-version/tab/article/ (accessed January 14, 2014). 9. Tomoeh Murakami Tse, “Congress Limits CEO Bonuses,” The Washington Post, February 14, 2009, http://www.washingtonpost.com/wp-dyn/content/arti- cle/2009/02/13/AR2009021303288.html?hpid=topnews (accessed January 14, 2014). 10. A November 2013 Swiss ballot initiative called the 1:12 Initiative for Fair Pay, which would limit the pay of executives to 12 times the amount earned by the lowest wage earner in the corporation, failed with approximately two-thirds of voters voting against it. The initiative was the idea of the youth wing of the Swiss Social Democrats, the goal being that no one should earn in a month what some people could not earn in a year. 11. Matthew Saltmarsh, “Europe Also Moves to Limit Executive Pay,” The New York Times, February 6, 2009. http://www.nytimes.com/2009/02/07/business/ worldbusiness/07bonus.html (accessed January 14, 2014). 12. Joann S. Lublin and Mike Esterl, “Executive Pay Curbs Go Global,” The Wall Street Journal, October 21, 2009, http://online.wsj.com/news/articles/ SB122453577468951501 (accessed January 13, 2014). 13. Jill Treanor, “Bankers’ Bonuses Hit with 50% Super-Tax in PBR,” The Guardian, December 9, 2009, http://www.theguardian.com/business/2009/dec/09/bank- bonus-super-tax (accessed January 13, 2014). 14. Jill Treanor, “Labour to Press George Osborne over RBS Bonuses,” The Guardian, January 14, 2014, http://www.theguardian.com/business/2014/jan/15/ labour- george-osborne-rbs-bonuses (accessed January 15, 2014). 15. British Broadcasting Corporation, “Bankers Accused of Using ‘Sneaky Ways to Dodge Bonus Limits,’” BBC News, January 10, 2014, http://www.bbc.co.uk/news/ business-25689877 (accessed January 15, 2014). 16. European Commission, “Capital Requirements Directive,” Last modified Febru- ary 17, 2014, http://ec.europa.eu/internal_market/bank/regcapital/legislation_in_ force_en.htm (accessed February 17, 2014). 232 ● Notes

17. Reuters, “Europe Set to Allow Banker Bonus Cap to Hit 250 percent of Salary,” October 24, 2013, http://uk.reuters.com/article/2013/10/23/uk-eu-banks-bonuses- idUKBRE99M14I20131023 (accessed January 15, 2014). 18. Reuters, “UK to Look at Longer Deferral for Banker Bonuses—Carney,” January 15, 2014, http://uk.reuters.com/article/2014/01/15/uk-britain-boe-carney-idUKBRE- A0E0YE20140115 (accessed January 15, 2014). 19. The Telegraph, “Novartis Chairman Apologises for ‘Golden Handshake,’” Febru- ary 22, 2013, http://www.telegraph.co.uk/finance/newsbysector/pharmaceutical- sandchemicals/9888351/Novartis-chairman-apologises-for-golden-handshake.html (accessed January 14, 2014). 20. Robert Dex, “MPs to Quiz BBC Bosses over Golden Handshake Payments,” The Independent, July 3, 2013, http://www.independent.co.uk/news/uk/politics/mps-to- quiz-bbc-bosses-over-golden-handshake-payments-8685112.html (accessed January 14, 2014). 21. Refer to Appendix 10.1 for a comprehensive list of topics addressed by the act. 22. Sec. 4 (k) engaging in activities that are financial in nature.—(1) in general.—Not- withstanding subsection (a), a financial holding company may engage in any activity, and may acquire and retain the shares of any company engaged in any activity, that the Board, in accordance with paragraph (2), determines (by regulation or order)— (A) to be financial in nature or incidental to such financial activity; or (B) is comple- mentary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally. 23. Raymond J. Gustini, Lloyd H. Spencer, William E. Kelly, Keith L. Krasney, and Paulette J. Morgan, “Dodd-Frank Wall Street Reform and Consumer Protection Act Signed,” Nixon Peabody LLP Global Finance Alert (2010). 24. GovTrack, “H. R. 4173.” 25. Ibid. 26. Ibid. 27. Ibid. 28. Skadden, “Venture Capital Fund Adviser Exemption,” memorandum, November 4, 2011, http://www.skadden.com/newsletters/Venture_Capital_Fund_Adviser_ Exemption.pdf (accessed February 2, 2014). 29. GovTrack, “H. R. 4173.” 30. The Wall Street Journal, “SEC’s Final Rules on Venture Capital Exemption,” June 23, 2011, http://blogs.wsj.com/venturecapital/2011/06/23/read-secs-final-rules-on- venture-capital-exemption/ (accessed January 15, 2014). 31. Chadbourne and Parke LLP, “Summary and Analysis of the Volcker Rule in the Dodd-Frank Act—Prohibiting Bank Proprietary Trading and Investing in Hedge Funds, Private Equity Funds and Other Private Funds—It Affects More Than Just Funds,” July 29, 2010, http://www.chadbourne.com/files/Publication/ad549554- 9229-4f77-ae1e-461f43f28338/Presentation/PublicationAttachment/3591ff9a- cc61-4c94-b0d9-48a89f09796f/Volker%20Rule%20ca-%20Gale.pdf (accessed December 24, 2013). 32. Ibid. 33. Jesse Westbrook and Donal Griffin, “Citigroup’s Sharma Said to Be Planning Departure to Start Own Hedge Fund,” Bloomberg News, August 19, 2011, http:// www.bloomberg.com/news/2011-08-19/citigroup-s-sharma-said-to-be-planning-­ departure-to-start-own-hedge-fund.html (accessed January 16, 2014). Notes ● 233

34. Jeff Kearns, “Deutsche Bank Loses Option Trader Saiers to Hedge Fund ­Alphabet Management,” Bloomberg News, July 15, 2010, http://www.bloomberg.com/ news/2010-07-14/deutsche-bank-loses-option-trader-saiers-to-hedge-fund-­ alphabet-management.html (accessed January 27, 2014). 35. Clearinghouses are dedicated financial institutions whose task is to provide clearing and settlement services for financial derivatives, commodities derivatives, and securi- ties transactions. 36. Skadden, “Derivatives,” http://www.skadden.com/newsletters/FSR_Derivatives.pdf (accessed January 15, 2014). 37. Major swap participants and major security-based swap participants refer to anyone who participates in a swap that is regulated by the CFTC and the SEC respectively. 38. GovTrack, “H. R. 4173,” Title VIII Sec. 802, Findings and Purposes. 39. GovTrack, “H. R. 4173,” Title VIII Sec. 804, Designation of Systemic Importance. 40. GovTrack, “H. R. 4173,” Title IX Sec. 931, Findings. 41. Semler Brossy, “2012 Say on Pay Results,” September 5, 2012, http://www.sem- lerbrossy.com/wp-content/uploads/2012/09/SBCG-SOP-2012-09-05.pdf (accessed February 11, 2014). 42. Gabriele Steinhauser, Tom Fairless, and Neil Maclucas, “EU Reaches Deal to Curb Bank Bonuses,” The Wall Street Journal, February 28, 2013, http://online.wsj.com/news/arti- cles/SB10001424127887323293704578330814285107262 (accessed January 7, 2014). 43. The main edition of the code is published every six years, and supplemental volumes are published every year until the next main edition. The Code of Law is getting progressively larger; the current edition runs to over two hundred thousand pages! 44. Binyamin Applebaum, “Former Ohio Attorney General to Head New Consumer Agency,” The New York Times, July 17, 2011, http://www.nytimes.com/2011/07/18/ business/former-ohio-attorney-general-picked-to-lead-consumer-agency.html?_ r=1andpagewanted=alland (accessed January 20, 2014). 45. Meg Handley, “Do Record Profits Mean an End to Fannie Mae Conservatorship?” US News and World Report, April 2, 2013, http://www.usnews.com/news/blogs/ home-front/2013/04/02/do-record-profits-mean-an-end-to-fannie-mae-conserva- torship (accessed January 27, 2014). 46. Ben Protess and Peter Eavis, “JPMorgan Reaches Deal with Agency over Loans,” The New York Times, October 25, 2013, http://dealbook.nytimes.com/2013/10/25/ regulator-announces-own-pact-with-jpmorgan/ (accessed January 18, 2014). 47. Peter Henning, “With Freddie Mac Suit, Banks Face Billions More in Libor Claims,” The New York Times, March 20, 2013, http://dealbook.nytimes.com/2013/03/20/ with-freddie-mac-suit-banks-face-billions-more-in-libor-claims/ (accessed January 18, 2014). 48. Tom Schoenberg and Andrew Zajac, “Freddie Mac Sues Multiple Banks over Libor Manipulation,” Bloomberg Personal Finance, March 20, 2013, http://www.bloom- berg.com/news/2013-03-19/freddie-mac-sues-multiple-banks-over-libor-manipula- tion.html (accessed January 20, 2014). 49. The New York Times, “Fannie Mae Sues 9 Banks over Libor,” The New York Times, October 31, 2013, http://www.nytimes.com/2013/11/01/business/fannie-mae-sues- 9-banks-over-libor.html (accessed January 20, 2014). 50. Phillip Swagel, “A Transition in Fannie and Freddie Oversight,” The New York Times, January 8, 2014, http://economix.blogs.nytimes.com/2014/01/08/a-transition-in- fannie-and-freddie-oversight/ (accessed January 20, 2014). 234 ● Notes

51. “U.S. Judge Postpones Throwing Out Swipe Fee Cap on Debit Cards”Reuters , August 14, 2013, http://www.reuters.com/article/2013/08/14/financial-regulation- swipe-fees-idUSL2N0GF14620130814 (accessed February 13, 2014). 52. Consumer Federation of America, “Re: Urge Opposition to Moore Amend- ment to Strip Credit Insurance Authority from CFPA,” letter to Chairman Frank, O­ ctober 15, 2009, http://www.consumerfed.org/elements/www.consum- erfed.org/file/CFPA%20Moore%20credit%20insurance%20amendment%20 ­letter%282%29.pdf (accessed November 30, 2013). 53. Simon Johnson, “Filling a Fed Vacuum in Bank Supervision,” The New York Times, March 7, 2013, http://economix.blogs.nytimes.com/2013/03/07/filling-a-fed-vac- uum-in-bank-supervision/ (accessed January 21, 2014). 54. GovTrack, “H. R. 4173.” 55. Michael Hudson, “How Interest Rates Were Set, 2500 BC–1000 AD: Máš, tokos and fœnus as Metaphors for Interest Accruals,” Journal of the Economic and Social History of the Orient / Journal de l’histoire economique et sociale de l’Orient (2000): 132–61. 56. David Ross, “The Edict of Expulsion,” Britain Express, http://www.britainexpress. com/History/medieval/expulson-jews.htm (accessed January 21, 2014). 57. Cornelius Walford, The Insurance Guide and Hand-book: A Guide to the Principles and Practice of Life Assurance and a Hand-book of the Best Authorities on the Science, 2nd edition (London: Charles and Edwin Layton, 1867). 58. The Pew Charitable Trusts, “A Short History of Payday Lending Law,” last modi- fied July 18, 2012,http://www.pewstates.org/research/analysis /a-short-history-of- payday-lending-law-85899405668 (accessed January 21, 2014). 59. The Pew Charitable Trusts, “Payday Lending in America: Report 2,” February 2003, http://www.pewstates.org/uploadedFiles/PCS_Assets/2013/Pew_Choosing_­ Borrowing_Payday_Feb2013.pdf (accessed January 22, 2014). 60. National Conference of State Legislatures, “Payday Lending Statutes,” last modi- fied September 12, 2013, http://www.ncsl.org/research/financial-services-and-­ commerce/payday-lending-state-statutes.aspx (accessed January 22, 2014). 61. Consumer Federation of America, “Payday Loan Consumer Information,” http:// www.paydayloaninfo.org/state-information (accessed January 22, 2014). 62. Consumer Financial Protection Bureau, “Our First Enforcement Action against a Payday Lender,” November 20, 2013, http://www.consumerfinance.gov/blog/cat- egory/payday-loans/ (accessed January 23, 2014). 63. Peter Lattman, “Tribes Lose Battle to Shield Payday Sites from New York State Crackdown,” The New York Times, October 1, 2013, http://dealbook.nytimes. com/2013/10/01/tribes-lose-effort-to-block-new-york-from-regulating-their-on- line-lending/ (accessed January 23, 2014). 64. Title XIV. Sec. 1418. Six-month notice required before reset of hybrid adjustable- rate mortgages. § 128A. Reset of hybrid adjustable-rate mortgages. 65. U.S. Department of Housing and Urban Development, “HUD Office of Housing Counseling,” http://portal.hud.gov/hudportal/HUD?src=/program_offices/­housing/ sfh/hcc (accessed January 22, 2014). 66. There are branch offices of the BIS in Hong Kong and Mexico City. 67. Switzerland joined the group at a later stage, but the group continued to be referred to as the G-10. 68. Kevin F. Barnard and Alan W. Avery, “Basel III v Dodd-Frank: What Does It Mean for US Banks,” Who’s Who Legal Blog, http://www.whoswholegal.com/news/ features/article/28829/basel-iii-v-dodd-frank-does-mean-us-banks (2011). Notes ● 235

69. Basel Committee, “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems,” Basel Committee on Banking Supervision, Basel (2010). 70. Ibid. 71. Margaret E. Tahyar, Davis Polk, and Wardwell LLP, “Collins Amendment Sets Minimum Capital Requirements,” The Harvard Law School Forum on Corporate Governance and Financial Regulation, July 8, 2010, http://blogs.law.harvard.edu/ corpgov/2010/07/08/collins-amendment-sets-minimum-capital-requirements/(accessed December 19, 2013). 72. Basel Committee, “Basel III: Phase-In Arrangements,” Basel Committee on Banking Supervision, Basel (2010). 73. Geoffrey T. Smith, “Banks Get a Break on Leverage-Ratio Rules,” The Wall Street Journal, January 12, 2014, http://online.wsj.com/news/articles/SB1000142405270 2303819704579316584090630274 (accessed January 20, 2014). 74. Edward Wyatt, “Fed Proposes New Capital Rules for Banks,” The New York Times, December 20, 2011, http://www.nytimes.com/2011/12/21/business/fed-proposes- new-capital-rules-for-banks.html (accessed January 20, 2014).

Chapter 11 1. Joan Robinson, The Generalisation of the General Theory and Other Essays (London: Macmillan, 1979), 67–142. 2. Joseph A. Schumpeter, Theorie der Wirtschaftlichen Entwicklung (Leipzig: Dunker and Humblot, 1912). 3. Valerie R. Bencivenga and Bruce D. Smith, “Financial Intermediation and Endog- enous Growth,” The Review of Economic Studies 58, no. 2 (1991): 195–209. 4. Alexander Galetovic, “Financial Intermediation, Resource Allocation and Long-Run Growth,” Woodrow Wilson School of Public and International Affairs, Princeton University Discussion Paper 170, March 1994a. 5. Alexander Galetovic, “Credit Market Structure, Firm Quality and Long-Run Growth,” Woodrow Wilson School of Public and International Affairs, Princeton University Discussion Paper 171, May 1994b. 6. Bengt Holmstrom and Jean Tirole, “Financial Intermediation, Loanable Funds, and the Real Sector,” The Quarterly Journal of Economics 112, no. 3 (1997): 663–91. 7. Thierry Tressel, “Dual Financial Systems and Inequalities in Economic Develop- ment,” Journal of Economic Growth 8, no. 2 (2003): 223–57. 8. Robert G. King and Ross Levine, “Finance and Growth: Schumpeter Might Be Right,” The Quarterly Journal of Economics 108, no. 3 (1993): 717–37. 9. Raghuram G. Rajan and Luigi Zingales, “Financial Dependence and Growth,” The American Economic Review 88, no. 3 (1998): 559–86. 10. Ross Levine, “International Financial Liberalization and Economic Growth,” Review of International Economics 9, no. 4 (2001): 688–702. 11. Peter L. Rousseau and Paul Wachtel, “Financial Intermediation and Economic Per- formance: Historical Evidence from Five Industrialized Countries,” Journal of Money, Credit and Banking (1998): 657–78. 12. Jess Benhabib and Mark M. Spiegel, “The Role of Financial Development in Growth and Investment,” Journal of Economic Growth 5, no. 4 (2000): 341–60. 13. Dimitris K. Christopoulos and Efthymios G. Tsionas, “Financial Development and Economic Growth: Evidence from Panel Unit Root and Cointegration Tests,” ­Journal of Development Economics 73, no. 1 (2004): 55–74. 236 ● Notes

14. Philippe Aghion, Peter Howitt, and David Mayer-Foulkes, “The Effect of Financial Development on Convergence: Theory and Evidence,” The Quarterly Journal of Eco- nomics 120, no. 1 (2005): 173–222. 15. Chung-Hua Shen and Chien-Chiang Lee, “Same Financial Development yet Dif- ferent Economic Growth: Why?” Journal of Money, Credit and Banking (2006): 1907–44. 16. Rati Ram, “Financial Development and Economic Growth: Additional Evidence,” The Journal of Development Studies 35, no. 4 (1999): 164–74. 17. Philip Arestis, Panicos O. Demetriades, and Kul B. Luintel, “Financial Development and Economic Growth: The Role of Stock Markets,”Journal of Money, Credit and Banking 33, no. 1 (2001): 16–41. 18. Ross Levine, “Bank-Based or Market-Based Financial Systems: Which Is Better?” Journal of Financial Intermediation 11, no. 4 (2002): 398–428. 19. Mohsin S. Khan and Abdelhak S. Senhadji, “Financial Development and Economic Growth: A Review and New Evidence,” Journal of African Economies 12, no. suppl. 2 (2003): ii89–ii110. 20. Jose de Gregorio and Pablo E. Guidotti, “Financial Development and Economic Growth,” World Development 23, no. 3 (1995): 433–48. 21. Felix Rioja and Neven Valev, “Finance and the Sources of Growth at Various Stages of Economic Development,” Economic Inquiry 42, no. 1 (2004): 127–40. 22. Ross Levine and Sara Zervos, “Stock Markets, Banks, and Economic Growth,” The American Economic Review 88, no. 3 (1998): 537–58. 23. Jenny A. Minier, “Are Small Stock Markets Different?”Journal of Monetary Economics 50, no. 7 (2003): 1593–602. 24. Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine, “Bank Concentration, Com- petition, and Crises: First Results,” Journal of Banking and Finance 30, no. 5 (2006): 1581–603. 25. Franklin Allen and Douglas Gale, Comparing Financial Systems (Cambridge: MIT Press Books, 2001), 2. 26. John H. Boyd and Gianni De Nicolo, “The Theory of Bank Risk Taking and Com- petition Revisited,” The Journal of Finance 60, no. 3 (2005): 1329–43. 27. Donald Morgan, Bertrand Rime, and Philip Strahan, Bank Integration and State Busi- ness Cycles, no. w9704 (National Bureau of Economic Research, 2003), 1555–84. 28. Stephen D. Williamson, “Bank Failures, Financial Restrictions, and Aggregate Fluc- tuations: Canada and the United States, 1870–1913,” Federal Reserve Bank of Min- neapolis Quarterly Review 13, no. 3 (1989). 29. Dean F. Amel and J. Nellie Liang, “The Relationship between Entry into Banking Markets and Changes in Legal Restrictions on Entry,” Antitrust Bulletin 37 (1992): 631–50. 30. Paul S. Calem, “The Impact of Geographic Deregulation on Small Banks,” Business Review November (1994): 17–31. 31. Susan McLaughlin, “The Impact of Interstate Banking and Branching Reform: Evi- dence from the States,” Current Issues in Economics and Finance 1, no. 2 (1995): 1–5. 32. Mary S. Schranz, “Takeovers Improve Firm Performance: Evidence from the Bank- ing Industry,” Journal of Political Economy (1993): 299–326. 33. Allen N. Berger, Anil K. Kashyap, Joseph M. Scalise, Mark Gertler, and Benjamin M. Friedman, “The Transformation of the US Banking Industry: What a Long, Strange Trip It’s Been,” Brookings Papers on Economic Activity (1995): 55–218. Notes ● 237

34. Ronald Spieker, “Bank Branch Growth Has Been Steady: Will It Continue?” FDIC Draft FOB 8 (2004). 35. Jith Jayaratne and Philip E. Strahan, “The Finance-Growth Nexus: Evidence from Bank Branch Deregulation,” The Quarterly Journal of Economics 111, no. 3 (1996): 639–70. 36. Randall S. Kroszner and Philip E. Strahan, “What Drives Deregulation? Economics and Politics of the Relaxation of Bank Branching Restrictions,” The Quarterly Journal of Economics 114, no. 4 (1999): 1437–67. 37. Levine and Zervos, “Stock Markets, Banks, and Economic Growth,” 537–58. 38. Donald G. Freeman, “Did State Bank Branching Deregulation Produce Large Growth Effects?” Economics Letters 75, no. 3 (2002): 383–89. 39. Jayaratne and Strahan, “The Finance-Growth Nexus,” 639–70. 40. Howard J. Wall, “Entrepreneurship and the Deregulation of Banking,” Economics Letters 82, no. 3 (2004): 333–39. 41. Rocco R. Huang, “Evaluating the Real Effect of Bank Branching Deregulation: Comparing Contiguous Counties across US State Borders,” Journal of Financial Eco- nomics 87, no. 3 (2008): 678–705. 42. Thorsten Beck, Ross Levine, and Alexey Levkov, “Big Bad Banks? The Winners and Losers from Bank Deregulation in the United States,” The Journal of Finance 65, no. 5 (2010): 1637–67. 43. Oded Galor and Joseph Zeira, “Income Distribution and Macroeconomics,” The Review of Economic Studies 60, no. 1 (1993): 35–52. 44. Abhijit V. Banerjee and Andrew F. Newman, “Occupational Choice and the Process of Development,” Journal of Political Economy (1993): 274–98. 45. Morgan, Rime, and Strahan, “Bank Integration and State Business Cycles.” 46. Morgan, Rime, and Strahan, “Bank Integration and State Business Cycles,” 1555–84. 47. Ricardo Correa, Bank Integration and Financial Constraints: Evidence from US Firms (Federal Reserve Board, 2008), 29. 48. R. Glenn Hubbard and Darius Palia, “Executive Pay and Performance Evidence from the US Banking Industry,” Journal of Financial Economics 39, no. 1 (1995): 105–30. 49. Jayaratne and Strahan, “The Finance-Growth Nexus,” 639–70. 50. Kevin J. Stiroh and Philip E. Strahan, “Competitive Dynamics of Deregulation: Evi- dence from US Banking,” Journal of Money, Credit, and Banking 35, no. 5 (2003): 801–28. 51. Rebecca S. Demsetz and Philip E. Strahan, “Diversification, Size, and Risk at Bank Holding Companies,” Journal of Money, Credit and Banking (Ohio State University Press) 29, no. 3 (1997): 300–13. 52. Houston, James and Marcus, “Capital Market Frictions and the Role of Internal Capital Markets in Banking,” 135–164. 53. Joel F. Houston and Christopher James, “Do Bank Internal Capital Markets Promote Lending?” Journal of Banking and Finance 22, no. 6 (1998): 899–918. 54. Allen N. Berger and Gregory Udell, “Universal Banking and the Future of Small Business Lending,” in Financial System Design: The Case for Universal Bank- ing, eds. Anthony Saunders and Ingo Walters (Chicago: Irwin Publishing, 1996), 558–627. 55. Joe Peek and Eric S. Rosengren, “Bank Consolidation and Small Business Lend- ing: It’s Not Just Bank Size That Matters,”Journal of Banking and Finance 22, no. 6 (1998): 799–819. 238 ● Notes

56. Jason Karceski, Steven Ongena, and David C. Smith, “The Impact of Bank Consoli- dation on Commercial Borrower Welfare,” The Journal of Finance 60, no. 4 (2005): 2043–82. 57. Emilia Bonaccorsi Di Patti and Giorgio Gobbi, “Winners or Losers? The Effects of Banking Consolidation on Corporate Borrowers.” The Journal of Finance 62, no. 2 (2007): 669–95. 58. Rajan and Zingales, “Financial Dependence and Growth,” 559–86. 59. U.S. federal government agencies switched from using the Standard Industrial Clas- sification (SIC) to the North American Industrial Classification System (NAICS) codes in 1997. This creates a discontinuity in the data despite the availability of concordance tables.

Chapter 12 1. Tom Hindle, “The Third Age of Globalisation: Enter the True Multinationals,” The Economist, November 20, 2003, http://www.economist.com/node/ 2187141 (accessed February 10, 2014). 2. Dario Focarelli and Alberto Franco Pozzolo, “Where Do Banks Expand Abroad? An Empirical Analysis,” The Journal of Business 78, no. 6 (November 2005): 2435–64. 3. Allen N. Berger and Robert DeYoung, “Technological Progress and the Geographic Expansion of the Banking Industry,” Journal of Money, Credit and Banking 38, no.6 (September 2006): 1483–513. 4. For a detailed discussion, refer to Linda S. Goldberg, “Understanding Banking Sec- tor Globalization,” IMF Staff Papers 56, no. 1 (2009):171–97. 5. Paul Romer, “Idea Gaps and Object Gaps in Economic Development,” Journal of Monetary Economics 32 (1993): 543–73. 6. Guha, “A Global Outlook.” 7. Goldberg, “Understanding Banking Sector Globalization,” 171–97. 8. Claudia M. Buch, Cathérine T. Koch, and Michael Koetter, “Do Banks Benefit from Internationalization? Revisiting the Market Power–Risk Nexus,” Review of Finance 17, no. 4 (2013): 1401–35. 9. Keeley, “Deposit Insurance, Risk, and Market Power in Banking,” 1183–1200. 10. Franklin Allen and Douglas Gale, “Competition and Financial Stability,” Journal of Money, Credit and Banking 36, no. 3 (2004): 453–80. 11. Robert Hauswald and Robert Marquez, “Competition and Strategic Informa- tion Acquisition in Credit Markets,” Review of Financial Studies 19, no. 3 (2006): 967–1000. 12. Nicola Cetorelli and Linda S. Goldberg, “Banking Globalization and Monetary Transmission,” The Journal of Finance 67, no. 5 (October 2012): 1811–43. 13. Buch, Koch, and Koetter, “Do Banks Benefit from Internationalization?” 1401–35. 14. Goldberg, “Understanding Banking Sector Globalization,” 171–97. 15. Rafael La Porta, Florencio López de Silanes, Andrei Shleifer, and Robert Vishny, “Law and Finance,” Journal of Political Economy 106 (1998): 1113–55. 16. Daniel R. Kelemen and Eric C. Sibbitt, “The Globalization of American Law,” Inter- national Organization 58 (Winter 2004): 103–36. 17. Steven K. Vogel, Freer Markets, More Rules: Regulatory Reform in Advanced Industrial Countries (Ithaca, NY: Cornell University Press, 1998). 18. R. DeYoung and Daniel E. Nolle, “Foreign-Owned Banks in the U.S.: Earning Market Share or Buying It?” Journal of Money, Credit, and Banking 28, no.4 (1996): 622–36. Notes ● 239

19. C. E. Chang, Iftekhar Hasan, and William C. Hunter, “Efficiency of Multinational Banks: An Empirical Investigation,” Applied Financial Economics 8, no. 6 (1998): 1–8. 20. Allen N. Berger, Robert DeYoung, Hesna Genay, and Gregory F. Udell, “Globaliza- tion of Financial Institutions: Evidence from Cross-Border Banking Performance,” Brookings-Wharton Papers on Financial Services 3 (2000): 23–158. 21. R. Vander Vennet, “The Effect of Mergers and Acquisitions on the Efficiency and Profitability of EC Credit Institutions,” Journal of Banking and Finance 20, no. 9 (1996): 1531–58. 22. Arunava Bhattacharya, C. A. Knox Lovell, and Pankaj Sahay, “The Impact of Liberal- ization on the Productive Efficiency of Indian Commercial Banks,” European Journal of Operational Research 98 (1997): 332–45. 23. Claudia M. Buch, “Distance and International Banking,” Review of International Economics 13, no. 4 (2005): 787–804. 24. Claudia M. Buch and Gayle DeLong, “Cross-Border Bank Mergers: What Lures the Rare Animal?” Journal of Banking and Finance 28, no. 9 (September 2004): 2077–102. 25. Adrian E. Tschoegl, “FDI and Internationalization: Evidence from U.S. Subsidiaries of Foreign Banks,” Journal of International Business Studies 33, no. 4 (Fourth Quarter 2002): 805–15. 26. Alfred Slager, “Internationalization of Banks: Strategic Patterns and Performance,” SUERF—The European Money and Finance Forum, 2005,http://www.suerf.org/ download/studies/study20054.pdf. (accessed May 24, 2014). 27. Boyd and De Nicolo, “Bank Risk Taking and Competition,” 1329–43. 28. Robert W. Kolb, ed., Financial Contagion: The Viral Threat to the Wealth of Nations (Hoboken, NJ: John Wiley and Sons, Inc., 2011), 3. 29. The Economist, “CSI: Credit Crunch.” 30. Philip R. Lane, “Financial Globalisation and the Crisis,” Open Economies Review 24, no. 3 (July 2013): 555–80. 31. Stijn Claessens, Richard J. Herring, and Dirk Schoenmaker, “A Safer World Finan- cial System: Improving the Resolution of Systemic Institutions,” 12th Geneva Report on the World Economy. International Center for Monetary and Banking Studies, July 2010.

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5. Susie Poppick and Taylor Tepper, “What Does the Bank of the Future Look Like?” CNN Money, November 8, 2013, http://money.cnn.com/2013/11/05/pf/best- banks-future.moneymag/ (accessed February 16, 2014). 6. George Hanc, “The Future of Banking in America,” FDIC Banking Review 16, no. 1 (2004), http://www.fdic.gov/bank/analytical/banking/2004nov/article1/br16n- 1art1.pdf (accessed February 16, 2014). 7. Sewell Chan, “Senate, Weakly, Backs New Term for Bernanke,” The New York Times, January 28, 2010, http://www.nytimes.com/2010/01/29/business/economy/29fed. html (accessed February 16, 2014). 8. The vote was partly reflective of the polarized politics in Washington. However, tem- peratures in Washington dropped to single digits that day due to the polar vortex, and the readings in the upper Midwest and Great Lakes regions fell to 30 below zero in some spots. As a result, a lot of the senators were also away from the Hill. 9. Jim Puzzanghera, “Obama to Nominate Stanley Fischer, 2 Others to Federal Reserve Seats,” Los Angeles Times, January 10, 2014, http://www.latimes.com/business/ money/la-fi-mo-federal-reserve-stanley-fischer-obama-nominate-lael-brainard- 2014011Ame0,0,2990118.story#axzz2rXEfEx00 (accessed February 16, 2014). 10. Jon Hilsenrath and Victoria McGrane, “Fed’s Yellen Sets Course for Steady Bond-Buy Cuts,” The Wall Street Journal, February 11, 2014, http://online. wsj.com/news/articles/SB100014240527023036502045793766026579965 42?mg=reno64-wsjandurl=http%3A%2F%2Fonline.wsj.com%2Farticle%2 FSB10001424052702303650204579376602657996542.html (accessed February 16, 2014). 11. Barbara A. Rehm, “Why Bankers and Regulators See Very Different Future for Giant Banks,” American Banker, November 19, 2013, http://www.americanbanker. com/bankthink/why-bankers-and-regulators-see-very-different-future-for-giant- banks-1063770-1.html (accessed February 16, 2014). 12. Charles Riley, “S&P Downgrades U.S. Credit Rating,” CNN Money, August 6, 2011, http://money.cnn.com/2011/08/05/news/economy/downgrade_rumors/ (accessed February 16, 2014). 13. Bill Conerly, “Future of the Dollar as World Reserve Currency,” Forbes, October 25, 2013, http://www.forbes.com/sites/billconerly/2013/10/25/future-of-the-dollar-as- world-reserve-currency/ (accessed February 16, 2014). 14. John Mauldin, “China’s Renminbi Is Well on Its Way to Becoming a Global Reserve Currency,” Business Insider, September 29, 2013, http://www.businessinsider.com/ renminbi-soon-to-be-a-reserve-currency-2013-9 (accessed February 16, 2014). 15. Conerly, “Future of the Dollar.” Bibliography

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ABN AMRO, 208 American Trust Company (CA), 32 accessibility of banking services, 35–36, Ando, Albert, 66 41–42, 95, 167–73 Arestis, Philip, Panicos O. Demetriades, Accord of 1951, 64 and Kul B. Luintel, 187 Act to Organize and Regulate Banking Argentina, 182, 205 Associations (1937), 7 Argo Group, 166 Adams & Co. (San Francisco), 29–30 Arizona, 26, 57, 106, 133, 177–78 adaptive expectations, 69 Arkansas, 4–5, 11–12, 36, 177–78 Adkins v. Children's Hospital (1923), 81 Arthur Anderson LLP, 229n42 Aghion, Philippe, Peter Howit, and David Asset-Backed Securitization Process, Mayer-Foulkes, 187 166–67 Agricultural Adjustment Act of 1933 Australia, 17, 18, 28, 75, 96, 182, 208, (AAA), 81 210 Alabama, 7, 9, 11–12, 177–78 Austria, 17, 46, 72, 77, 83 Alaska, 5, 19, 26–27, 57, 177–78, 222n3 automated teller machines (ATMs), 5, 86, Aldrich, Nelson Wilmarth, 3, 50–51 190, 191, 211–12 Aldrich-Vreeland Act (1908), 3, 50–51 Alexander Hamilton U.S. Custom House, Bachus, Spencer, 164 21 Bair, Sheila, 174, 183 Alhadeff, David A., 42 Balanced Budget Act of 1997, 114 Allen, Franklin and Douglas Gale, 189, Banca Monte dei Paschi di Siena 205 (1472), 1 Allied Irish Bank, 208 Banco Bilbao Vizcaya Argentina, 150 Alphabet Management LLC, 161 Bank and Savings Association Holding Aly, Hassan Y. et al., 41 Company and Depository Amel, Dean F. and J. Nellie Yang, 189 Institution Regulatory American Asiatic Underwriters, 109 Improvements Act of 2010 (Volcker American Express, 140, 142 Rule), 5–6, 159–61 American International Group (AIG), bank failures, 3, 10, 14, 31, 33, 77, 109, 142 188–89 American Life Insurance Company see also bankruptcy (Alico), 142 Bank for International Settlements, 182, American Recovery and Reinvestment 234n66 Act of 2009 (stimulus bill), 144–45, Bank Holding Company Act of 1956, 5, 149, 152, 178 87–88, 115, 118, 153, 160, 232n22 262 ● Index

Banking Act of 1933 (Glass-Steagall Act), Beck, Thorsten, Asli Demirgü-Kunt, and 3–4, 37, 64, 77–80 Ross Levine, 188–89, 191 Banking Act of 1935, 37–39 Beck, Thorsten, Ross Levine, and Alexey banking technology, 121, 134, 172–73, Levkov, 191 211–12 Belgium, 17, 150, 182 banknotes, 8–11, 12, 13, 14–15, 29 Bencivenga, Valerie R. and Bruce D. Bank of Albany (1792), 24 Smith, 185 Bank of America, 141, 143, 161, 171, Benhabib, Jess and Mark M. Spiegel, 172, 184, 208 186–87 Bank of America National Trust and Benston, George G., Gerald A. Hanweck Savings Association, 32 and David B. Humphrey, 40–41 Bank of America of California, 32 Berger, Allen N., and Gregory Udell, 193 Bank of California, N.A., 32 Berger, Allen N., and Robert De Young, Bank of Columbia at Hudson (1793), 24 202, 207 Bank of England (1694), 2, 17, 25, Berger, Allen N., et. al, 190, 207 44–45, 47, 88, 96, 151 Bernanke, Ben Shalom, 58, 76–77, 134, Bank of Italy, 32, 34 144–45, 145–46, 212, 213 Bank of Italy National Trust and Savings Berner, Richard, et. al., 67 Association, 32 Bhattacharya, Arunava, C. A. Knox Bank of Montreal, 208 Lovell, and Pankaj Sahay, 207–8 Bank of New York (1784), 2, 23–24 Blankfein, Lloyd, 149 Bank of New York Mellon (2007), 24, BMO Capital Markets Group, 61 184 BNP Paribas Securities Corp., 61, 208 Bank of North America (1781), 1–2, 46, Bonaccorsi Di Patti, Emilia and Giorgio 47 Gobbi, 193 Bank of Nova Scotia, 61 bond markets Bank of Pennsylvania (1780), 1, 23 credit rating, 137–38 Bank of the United States (1791), 2, 7, free banking era, 8–9, 11–12 24, 47 interest rates, 64, 74 Bank of Tokyo-Mitsubishi, 171, 208 junk bonds, 102, 105, 138 bankruptcy Liberty Loan bonds, 73–74 Dodd-Frank Act and, 155–56 open market purchases, 15, 59–63, Enron Corporation bankruptcy, 120, 105, 165–66, 213, 230n1 129–30, 131, 145 Patriot Bonds, 123 Federal Reserve System and, 155–57 Treasury bonds, 5–6, 15, 26, 62, 118, liquidation, 6, 131–32, 155–56 123, 159–61, 214 Bankruptcy Abuse Prevention and see also currency Consumer Protection Act of 2005 Boone Indicator, 205 (BAPCPA), 131–32 Boyd, John H. and Gianni De Nicolo, Bankruptcy Reform Act of 1978, 189, 209 131–32 Brainard, Lael, 213 Bank Secrecy Act of 1970 (Currency and branch banking Foreign Transactions Reporting Act), use of term, 35 88 accessibility of services and, 41–42 Barclays Capital Inc., 61, 141, 150, automated teller machines (ATMs), 5, 151–52, 171, 172 86, 190, 191, 211–12 Basel Committee on Banking Supervision bank holding companies and, 5 (BCBS), 60, 149, 151, 152, 182–84 banking market growth, 194–95 Bear Stearns, 139–40, 143 bank size/bank costs, 40–41, 202 Index ● 263

commercial banking and, 4–5 Cagan, Phillip, 73 Dodd-Frank Act and, 157 Calem, Paul S., 189 free banking system and, 9–13 California impact on economic growth, 189–91 bank failures, 33–34 interstate banking, 5, 189–90, 189–91 banking market growth, 194–95 intrastate branching, 189–91, 196–97 branch banking, 32–34, 194–95, 196 loan-making process standards, 33 branch banking/unit banking study loan-to-deposit ratios, 42 (1960), 37 national banks and, 36–37 California gold rush, 27–29 pedestrian walkway anecdote, 36 commercial banks, 30, 31–32 restrictions for state banks, 4–5, 32, 33, early banking in, 29–34 36–37, 87 Federal Open Market Committee, restrictions on branch banking, 36–37 37–38 unit banking vs., 4–5, 35 Federal Reserve Bank of California Brazil, 65, 134, 182 (1914), 29 Bretton Woods system, 67, 84–85, 92–94 financial panics, 31 British Bankers Association, 170 Fugitive Slave Act, 28–29 British Broadcasting Corporation, 152 gold rush, 26–29 Brossy, Semler, 166 historical development, 26–27, 28 Brown, Scott, 148, 159–60 impact of Federal Reserve Act, 34 Bryan, William Jennings, 17–18 international banking, 202–5 Buch, Claudia M., Cathérine T. Koch, Mexican-American War, 27 and Michael Koetter, 204, 205 payday lending, 177–78 Buch, Claudia M. and Gayle DeLong, savings banks, 31 208 Treaty of Guadalupe Hidalgo, 28–29 Buffett, Warren, 141 unit banking, 194–95 building societies, 96 California Bank Act (1909), 31–32 Bulgaria, 17 California Safe Deposit and Trust Burns, Arthur, 66 Company, 31–32 Bush (George W.) administration California State Banking Department, Bankruptcy Abuse Prevention and 33–34 Consumer Protection Act of 2005, Canada, 17, 67, 182, 186, 189, 202 131 Cantor Fitzgerald & Co., 61, 123 cheap credit crisis, 134–35 Capehart Act (National Housing Act of Commodity Futures Modernization 1934), 79–80, 99 Act legacy, 129–30 Carney, Mark, 151 credit ratings, 137–38 Carter administration, 104, 212 dot-com bubble, 121–22 Cash America International, Inc., 178 Fair and Accurate Credit Transactions Castle Clinton, 22 Act of 2003, 131 Celeste, Dick, 106 housing industry crisis, 132–34 central banking inflation, 135–36 clearinghouses, 13–14, 24–25 interest rate climbs, 135–36 early establishment of, 1–2 oil price increase, 138–39 European heritage of, 43–46 Sarbanes-Oxley Act of 2002, 130–31 foreign ownership of, 2 securitization, 136–37 impact of Federal Reserve Act on, September 11 attacks, 122–25 51–56 subprime lending, 136 National Banking Commission and, tax cuts, 125–29 49–51 264 ● Index central banking (continued ) branch banking and, 4–5, 193t panic of 1907, 49–51 chartered by states, 2 pre-Federal Reserve era, 46–49 commercial bank investment certified public accounting firms, 166–67 regulation, 159–61 Cetorelli, Nicola and Linda S. Goldberg, conflict of interest trading, 160 205 consolidation, 211–12 Chang, C.E. Iftekhar Hasan, and William Glass-Steagal Act and, 3–4 C. Hunter, 207 government securities and, 3 Chartered West India Company, 21 investment banking activities and, 3–4 chartering authority state charters, 2 automatic chartering system, 25 unit banking, 193t bank proliferation and, 38–39 Volcker Rule, 5–6, 159–61 federal/state independence, 38–39 Commodity Exchange Act of 1936, free banking era, 7–13 119–20, 161, 163 increase in bank formation, 86–87 Commodity Futures Modernization Act process requirements, 38–39 of 2000 (CMFA), 119–21, 129–30, Chase Manhattan, 208 146, 161 Chemical Banking, 208 Commodity Futures Trading Chile, 205 Commission, 153 China, 16, 25, 85, 92, 93, 182, 215 commodity trading, 162–63 Chinese Exclusion Act of 1882, 27 Competitive Equality Banking Act of Christopoulos, Dimitris K. and Efthymios 1987, 106 G. Tsionas, 187 Comprehensive Thrift and Bank Fraud Chrysler Group LLC, 143 Prosecution and Taxpayer Recovery Citicorp, 4, 118, 208 Act of 1990, 108–9 Citigroup Global Markets Inc., 4, 61, Compromise of Embedded Liberalism, 84 118, 143, 160–61, 166, 171–72, Comptroller of the Currency, 153 184 Conerly, Bill, 215 Citizens National Trust Savings Bank, 32 conflict materials disclosure, 181 Civilian Conservation Corps, 81 Connecticut, 7, 11–12, 24, 177–78 Civil Rights Act of 1964, 91 consolidation, 5, 118–19, 189–90, 202, Civil War, 2, 8, 11, 12, 15 207, 211 Clean Diamond Trade Act (2003), 181 Consumer Financial Civil Penalty Fund, clearinghouses, 13–14, 24–25, 49, 76–77, 169 161, 233n35 Consumer Financial Protection Act of Clinton administration, 111–21 2010, 167–73 Close the Enron Loophole Act (2007), Consumer Financial Protection Bureau 130 (CPFB), 153, 167–73, 178 Coinage Act of 1816 (Britain), 16 consumer protections Coinage Act of 1873 (US), 17 bankruptcy, 131–32 Cold War, 90, 92, 93 consumer education, 169–70, 175, Collins Amendment (Section 171), 154, 228n21 183 credit reporting, 88–89 Colombia, 205 Dodd-Frank Act and, 167–73 Colorado, 4–5, 36, 177–78 educational loans, 169 commercial banking fiduciary duty, 164 bank holding companies and, 4, 5 housing markets, 170–72 bank size/bank profitability, 39–40, identity theft, 131 202 investor protection, 163–67 Index ● 265

minimum wage, 81, 91 Currency and Foreign Transactions mortgage markets, 179–81 Reporting Act (Bank Secrecy Act of New Deal programs, 80–82 1970), 88 older Americans, 81, 170 custody banks, 24, 184 payday loans, 175–78 payment card transaction fees, 172–73 Daiwa Capital Markets America Inc., 61 retirement plans, 91, 126, 149, 170 Danske Bank, 45, 150 service members, 170 Darling, Alistair, 150 Contract Work Hours and Safety Date, Rajeev, 168 Standards of 1962, 91 Davis, Owen Wilson, 14 cooperative banks, 39–40 debt, 11–12, 39, 166–67 Cordray, Richard, 167–68 Deficit Reduction Act of 1993 (Omnibus Corn Laws, 16, 22, 23, 45 Budget Reconciliation Act of 1993/ Correa, Ricardo, 192 OBRA-93), 112–13 Council of Inspector General on Financial De Gregorio, Jose and Pablo E. Guidotti, Oversight (CIGFO), 167 188 Cranson, Alan, 104 Delaware, 177–78 credit rating agencies, 6, 137–38, 146, de Leeuw, Frank, 66 149, 159, 164–65, 168 214 Deloitte LLP, 229n42 Credit Suisse First Boston, 3–4, 61, 171, Demsetz, Rebecca S. and Philip E. 172 Strahan, 192 Credit Suisse Securities (US) LLC, 61 Denmark, 17, 150 credit unions, 4, 95, 131, 153, 157, Department of Housing and Urban 162–63, 167, 170, 211–12 Development (HUD), 108, 148, Crime Control Act of 1990, 108, 167, 180–81 226n32 Department of the Treasury Cromwell, Oliver, 16, 176 under the Obama administration, currency 148–49 banknotes, 8–11, 12, 13, 14–15, 29 Office of the Comptroller of the counterfeiting, 2, 7, 15, 44, 53 Currency (OCC), 2, 14, 26, 38, 86, dollar as reserve currency, 71–72, 84, 103, 110, 157 92, 214–15 Office of Thrift Supervision, exchange rates, 17–19, 24, 43, 63, 67, 156–57 84–85, 93, 103, 172 deposit insurance systems, 13–14, 25, gold standard, 15–19, 51–52, 63–64, 79–80 72–73, 74, 76, 77, 84 Depository Institutions Deregulation and greenbacks, 14–15, 26 Monetary Control Act of 1980, 4, Gresham’s Law, 15 87, 104 inflation and, 19, 48, 51–52, 72–73, Depository Institutions Deregulation 75–76, 84 Committee, 80 liquidity of, 3 deregulation Office of the Comptroller of the overview of, 4, 5 Currency (OCC), 2, 14, 26, 38, 86, bank consolidation (mergers and 103, 110, 157 acquisitions), 5 renminbi, 215 Commodity Futures Modernization Susan. B. Anthony dollar, 30 Act of 2000, 119–21 treasury securities and, 3 competitiveness of, 4, 106, 196 uniform currency, 14–15 deregulation and growth, 189–93 Currency Act of 1900, 35–36 dot-com bubble, 121 266 ● Index deregulation (continued ) commercial bank investment Electronic Signatures in Global and regulation, 159–61 National Commerce act of 2000, conflict materials disclosure, 181 121 conflict of interest trading, 160 impact on economic growth, 189–93, consumer protection, 167–73 196–200 Council of Inspectors General, 167 international banking and, 4, 182–84, credit exposure reports, 154 202 credit rating agencies, 164–65 lending markets and, 192–93 credit-related insurance products, under the Reagan administration, 4, 173 92, 104–5, 112, 114, 190–91 emergency lending authority, 173–75 Regulation Q and, 4, 79–80, 104 exclusions & exceptions, 149, 160, reregulation and, 106, 182–84, 206 163, 164, 173 Riegle-Neal Interstate Banking and executive compensation, 166–67 Branching Efficiency Act of 1994, Federal Reserve Board of Governors 114–16 structure, 174–75 risk assessment and, 4, 102–3 financial institution liquidation, Telecommunications Act of 1996, 121 155–56 3-6-3 rule, 85–87 financial literacy and education, 169 see also Dodd-Frank Wall Street Reform financial market utilities, 162–63 and Consumer Protection Act of financial sector stability, 152–54 2010 funding modifications, 143, 178 derivatives Government Accountability Office, use of term, 119 174–75 credit ratings and, 164–65 government-sponsored enterprises, 160 Enron collapse, 129–30 hedge funds, 157–58, 160 over-the-counter derivatives, 120, insurance industry regulation, 158–59, 148–49, 161–62 160 regulation of, 6, 119–20, 149, 161–62 investment advisor regulation, 157–58 swap markets and, 161–62 investor protection, 163–67 Deutsche Bank Securities Inc., 61, 161, leverage ratios, 182–83 171, 172, 208 Lincoln Provision, 161–62 De Young, Robert and Daniel E. Nolle, liquidity ratios, 182–83 207 Moore Amendment, 173 digital banking, 121, 134, 172–73, mortgage markets, 179–81 211–12 nonbank financial institutions, 160 District of Columbia, 177–78 payment card transaction fees, 172–73 Dochow, Darrel W., 110, 226n39 private educational loans, 169 Dochow, Darryl W., 110 private equity funds, 157–58, 160 Dodd-Frank Wall Street Reform and SEC registration, 157–58 Consumer Protection Act of 2010 shareholder rights, 149, 153, 155–56, overview of, 147–49 166 bank holding company standards, short term/longterm gain contracts, 153–54 181 Basel III and, 182–84 supervisory and regulatory agencies, branching restrictions, 157 156–57, 170 capital requirements, 154 swap market regulation, 160, 161–62 Collins Amendment (Section 171), systemic risk mitigation, 162–63 154, 183 tax noncompliance, 170 Index ● 267

transparency, 147, 161–62, 164–65, Emergency Economic Stabilization Act of 206–7 2008, 142–44 underserved community access to Emergency Loan Act of 1917, 73–74 financial markets, 175–78 Employment Act of 1949, 90 Volcker Rule, 5–6, 159–61 energy products, 67, 102, 120–21, whistleblowing programs, 164 129–30, 144–45, 214 Donner, Piet Hein, 152 Enhancing Financial Institution dot-com bubble, 121 Safety and Soundness Act of 2010, Douglas Amendment, 5 156–57 Draghi, Mario, 213 Enron Corporation bankruptcy, 120, dual banking system, 3 129–30, 131, 145 Duncan, Martha, 107 environmental laws, 91 Durbin, Dick, 172 Enzler, Jared J. and James L. Pierce, Dwyer, Gerald P., 10 66–70 Equal Credit Opportunity Act, 169 East India Companies, 1, 43, 44 equity funds, 157–58 economic growth Erie Canal, 22, 24 branch banking and, 189–91 Ernst & Young, 229n42 deregulation and growth, 189–93, Eurobank Interbank Offered Rate 196–200 (Euribor), 171–72 economic growth/financial European Banking Authority, 151–52, development relationships, 185–91 210 edogenous growth models, 185–86 European Union, 39–40, 150–51, 182, forecasting models, 66–70 202, 206–7, 209–10 impact of deregulation on, 189–91 Evacuation Day, 22 impact of evolving legal systems, 206–7 Evanoff, Douglas D., 41–42 industrial sector examples, 197–200 exchange rates, 17–19, 24, 43, 63, 67, positive finance-growth nexus, 186–87 84–85, 93, 103, 172 post-WWI, 72–74 executive compensation, 143, 149–52, the stimulus bill of 2009, 144–45 166–67, 231n10 systemic banking crises and, 188–89 Economic Opportunity Act of 1964, 91 Fair and Accurate Credit Transactions of economic stability, 85–87 2003 (FACT), 131 educational investments, 89, 91, 144, Fair Credit Reporting Act of 1970, 169, 191 88–89, 131 Education Loan Ombudsman, 169 Fair Deal, 89–90 Edwards, Franklin R., 42 Fair Debt Collection Practices Act of Eisenhower administration, 90–91 1977, 88–89 electronic banking, 121, 134, 172–73, Fair Labor Standards Act of 1938 (FLSA), 211–12 81, 91 Electronic Fund Transfer Act of 1978, Fair Labor Standards Act of 1949 (FLSA), 172–73 90 Electronic Signatures in Global and Fannie Mae (Federal National Mortgage National Commerce Act of 2000, Association/FNMA), 101, 108, 140, 121 143, 148, 170–71, 172 Elementary and Secondary Education Act Farmers National Bank of Cordell, 107 of 1965, 91 Federal Aid Highway Act of 1956, 90 emergency banking services, 30, 53, 141, Federal Communications Commission 173–75, 176, 188–89 (FCC), 121 268 ● Index

Federal Deposit Insurance Corporation Federal Reserve Bank of California, 29 (FDIC), 3, 37, 148–49, 153, 156 Federal Reserve banks, 26, 29, 31, 54, Federal Deposit Insurance Corporation 56–58, 173–75, 184 Improvement Act of 1989, 5 Federal Reserve Board, 37–38, 58, Federal Highway Act of 1956, 90–91 76–77, 80 Federal Home Bank Loan Board, 108–9, Federal Reserve districts, 56–58 180 financial institution liquidation, Federal Home Loan Bank Act of 1932, 99 155–57 Federal Home Loan Mortgage Financial Stability Oversight Council Corporation/FHLMC (Freddie and, 153 Mac), 101, 108, 140, 143, 148, future power of, 212–14 170–71 Great Depression and, 63–64, 76–77 Federal Housing Administration, 89–90, Great Recession and, 144–45, 145–46, 100–101 148–49, 173–75 Federal Housing Finance Agency (FHFA), macro-models, 66–70 153, 167, 170–72 membership regulations, 3 Federal Housing Finance Board (FHFB), under the Obama administration, 108 148–49 Federal Insurance Office, 153 open market operations, 59–61, Federal National Mortgage Association/ 62––63 FNMA (Fannie Mae), 101, 108, primary dealers list, 61 140, 143, 148, 170–71, 172 Federal Savings and Loan Insurance Federal Open Market Committee, 37–38, Corporation (FSLIC), 79–80, 99, 52, 55, 59–61 108 Federal Reserve Act of 1913 (Glass-Owen Fidelity Investments, 24 Act), 3, 34, 37–39, 51–56, 57–58, Fillmore, Millard, 30 61–62, 80 financial crises Federal Reserve Bank of California, 29 Basel III and, 182–84 Federal Reserve Bank of New York, 26, causes of financial crisis of 2007–2008, 59–61, 63, 64, 123 132–39 Federal Reserve Board, 37–38, 58, 76–77, Dodd-Frank Act and, 5–6, 148 80 emergency lending authority, 173–75 Federal Reserve system financial contagion, 209–10 early development of, 3, 13, 51–56, financial panic of 1837, 25 61–62 financial panic of 1907 & 1908, 31 Accord of 1951, 64 global systemically important financial Board of Governors, 58–59, 153 institutions (G-SIFIs), 210 critiques of, 75–77 international responses to, 150–51 econometric forecasting models, 2007–2008 crisis, 139–46 66–70 see also Great Depression; Great Federal Deposit Insurance Corporation, Recession 3, 37, 148–49, 153, 156 financial institutions, use of term, 163 Federal Open Market Committee, Financial Institutions Reform, Recovery, 59–61 and Enforcement Act of 1989 Federal Reserve Act of 1913 (Glass- (FIRREA), 108–9, 180 Owen Act), 3, 34, 37, 51–56, Financial Institutions Supervisory Act of 57–58, 61–62, 80 1966, 88 Federal Reserve Bank of New York, 26, financial intermediaries, use of term, 59–61, 63, 64, 123 230n1 Index ● 269

Financial Literacy and Education debt defaults, 11–12 Commission, 169 deposit insurance systems, 13–14 financial markets, use of term, 230n1 end of free banking, 14–15 financial market utilities, 162–63 free banking legislation, 9–11 Financial Services Modernization Act free trade and, 16 (Gramm-Leach-Bliley Act of 1999), internal improvement era, 11–12 4, 116–19 international financial system and, Financial Stability Oversight Council 15–19 (FSOC), 148, 153, 162–63, 167 number of banks existent, 32 financial transactions, use of term, 163 protectionist mercantilist doctrine, 16 Finland, 17, 46 rural banks, 10 First Bank of the United States (1791), 2, specie, 8–11, 12, 13 7, 24, 47 unit banking and, 12 First Boston Corporation, 3–4 wildcat banking, 9–10, 29 FirstMerit Corp., 166 Freedom of Information Act (1967), 164 First National Bank of Boston, 3–4 Freeman, Donald G., 191 First National Bank of Philadelphia Friedman, Milton, 75, 76–77 (1863), 14 friendly societies, 96 First National Bank of Portland (1865), 3 Fugitive Slave Act, 28–29 First National Bank of St. Louis vs. State of Fulbright-Hays Act of 1961, 91 Missouri (1924), 36 Fulbright Program, 89 First National Gold Bank of San Francisco (1871), 30 G-10, 182, 234n67 First World War, 17, 62, 71–72, 83–84, Galetovic, Alexander, 185 98, 100, 201, 214, 228n29 Garn-St. Germain Depository Institutions Fischer, Stanley, 213 Act of 1982, 4, 105, 135–36 Fisher Hypothesis, 225n20 General Agreement on Tariffs and Trade Flannery, Mark J., 41, 85 (GATT), 85 Florida, 4–5, 11–12, 33, 36 General Motors, 143 Focarelli, Dario and Alberto Franco Georgia, 7, 9, 37–38, 177–78 Pozzolo, 201–2 Germany, 16, 17, 39–40, 67, 85, 93, 150, forecasting models, 66–70, 67 182, 205, 206–7, 208, 215 foreign banks, 4, 162–63, 202, 208 Giannini, A. P., 32 Forman, Joshua, 25 GI Bill (Servicemen’s Readjustment Act France, 12, 16, 39–40, 85, 150, 182, of 1944), 100 206–7, 208 Ginnie Mae/GNMA (Government FRB models, 69–70 National Mortgage Association), 101 Freddie Mac (Federal Home Loan Glass, Carter, 77–78 Mortgage Corporation/FHLMC), Glass-Owen Act (Federal Reserve Act of 101, 108, 140, 143, 148, 170–71 1913), 3–4, 34, 37, 51–56, 57–58, free banking system 61–62, 80 overview of, 2, 7–9 Glass-Steagal Act (Banking Act of 1933), automatic chartering, 8–9, 25 3, 4, 5–6, 37, 64, 77–80, 85, 104, bank failures, 10 118–19, 160 bonds and, 9 global financial crisis of 2008, 5–6, branch banking and, 12 147–48 central banking and, 13–14 globalization, 71–74, 83–85, 171–72, Civil War and, 11 182–84, 201–10 clearinghouses, 13–14 GMAC (Ally Financial), 143 270 ● Index

Goddard, John, Phil Moyneux, and John Greece, 17 O. S. Wilson, 39 Greenspan, Alan, 204 Goldberg, Linda S., 204–5 Gresham, Thomas, 15 Goldman, Sachs & Co., 61, 139, 141–42, 143, 149, 184 Hall, Tony, 152 gold standard, 15–19, 51–52, 63–64, Hamilton, Alexander, 2, 16, 23–24, 35, 72–73, 74, 76, 77, 84 46–47, 54 Government Accountability Office Hastings, Lansford, 27 (GAO), 173, 174–75 Hauswald, Robert and Robert Marquez, Government National Mortgage 205 Association (Ginnie Mae/GNMA), Hawaii, 5, 177–78 101 Hawley, Willis, 75 government-sponsored enterprises, 99, heath-care sector, 89, 114, 122, 126, 148, 101, 140, 160 158, 166, 187 Gramm-Leach-Bliley Act of 1999 hedge funds (Financial Services Modernization commercial bank investment Act), 4, 116–19 regulation, 159–61 Grant, Ulysses, 15 conflict of interest trading, 160 Grassley, Charles, 109–10 investment advisor regulation, 157–58 Gray, Edwin, 106 regulation of, 160–61 Great Depression, the SEC registration, 157–58 Banking Acts of 1933 and 1935, 77–80 Volcker Rule and, 5–6, 159–61 causes of, 74–76 Heinze Trust Company, 3 chartering authorities and, 38–39 Henderson model, 67 Federal Reserve response to, 63–64, Hibernia Savings and Loan Society, 76–77 29–30 global economy and, 71–74 Higher Education Act of 1965, 91 New Deal policy and, 80–82 High Pay Center (think tank), 150 New York Stock Exchange closure, holding companies, 5, 87–88, 115, 118, 74–75, 228n29 153, 160, 202 Second World War and, 80–82 Holland, 16 Great Moderation, 66 Holmstrom, Bengt and Jean Tirole, Great Plains region, 36, 196 185–86 Great Recession, the Home Mortgage Disclosure Act, 59, 169 causes of, 132–39 Home State Savings Bank of Cincinnati, Clinton administration and, 111–21 106 Deficit Reduction Act of 1993, 112–13 Homestead Act of 1862, 75 Federal Reserve system and, 144–45, homesteading, 75, 132, 222n3 145–46, 148–49, 173–75 Hong Kong, 92 global response to, 150–52 Hongkong and Shanghai Bank (CA), 30 Keating Five, 105–6 Horvitz, Paul M. and Bernard Shull, 42 Obama administration and, 148–49 Housing Act of 1937 (Wagner-Steagall Taxpayer Relief Act of 1997, 114 Act), 100 timeline of, 139–46 Housing Act of 1949, 89–90, 100 US national debt, 111–12 Housing and Economic Recovery Act of see also Dodd-Frank Wall Street Reform 2008, 178 and Consumer Protection Act of housing markets 2010 affordable housing, 98–101 Great Society programs, 91 Fair Deal and, 89–90 Index ● 271

government-sponsored enterprises, 99, unit banking, 194–95 101, 140, 160 unit banking/branch banking study mortgage reform, 179–81 (1960), 37 postwar economies and, 99–100 immigration, 22 predatory lending, 135–36, 173, Improving Access to Mainstream 179–81 Financial Institutions Act of 2010, public housing, 89–90, 100 175–78 redlining, 100–101 income taxes, 2, 15, 91, 112–13, 125–26, risk exposure, 101–3 129, 144, 169, 196 rural homes, 90 Independent National Mortgage savings and loans associations, 79, Corporation (IndyMac), 109–10 97–101, 103–8 India, 16, 182, 207–8 subprime lending, 101, 109, 136–37, Indiana, 7, 10–11, 11–12, 32, 177–78 140–41, 142, 179–81 Indonesia, 182 2007–2008 crisis, 132–38, 170–72 Industrial Revolution, 15, 17, 24, 35 see also mortgage markets IndyMac (Independent National Houston, Joel F. and Christopher James, Mortgage Corporation), 109–10 192 inflation Houston, Joel F. Christopher James, and budget surplus and, 93, 111 David Marcus, 192 disinflation, 204 HR 4173 (Wall Street Reform and forecasting models, 66, 67–68, 69 Protection Act of 2009), 147–48 globalization and, 204 see also Dodd-Frank Wall Street Reform hyperinflation, 73 and Consumer Protection Act of inflation-output tradeoff, 65–66 2010 inflation targeting, 65–66 HSBC Securities (USA) Inc., 61, 151–52, interest rates and, 51–52, 64, 86–87, 208 135–36, 145, 225n20 Huang, Rocco R., 191 money supply and, 19, 48, 51–52, Hubbard, R. Glenn and Darius Palia, 192 72–73, 75–76, 84 HUD (Department of Housing and insurance industry, 3–4, 14, 158–59, 173 Urban Development), 108, 148, see also Federal Deposit Insurance 167, 180–81 Corporation (FDIC) interest rates, 42, 171–72, 173, 175–77, Idaho, 177–78 201–10 identity theft, 91, 126, 131, 149, 170 International Bank for Reconstruction Illinois and Development (IBRD), 85 banking market growth, 194–95 international banking banking panics, 11 Basel Committee on Banking branch banking, 194–95 Supervision, 60, 149, 151, 152, branch banking restrictions, 4–5 182–84 Chicago as central reserve city, 26 cause of internationalization, 201–3 debt defaults, 11–12 deregulation and, 4, 182–84, 202 early bank growth, 32 foreign deposits, 202–5 Federal Open Market Committee, international economic organizations, 37–38 83–85 free banking era and, 7 internationalization of banking, international banking, 202–5 201–10 payday lending, 177–78 International Monetary Fund, 84–85 restrictions on branch banking, 36 Investment Advisors Act of 1940, 156–57 272 ● Index investment banking Kimberley Process Certification commercial banking activities and, Scheme, 181 3–4, 78, 79, 86, 118–19 King, Robert G. and Ross Levine, 186 food commodities markets, Kissinger, Henry, 93 120–21 Klein, Lawrence, 66–70 Great Depression and, 74, 78 Korea Development Bank, 141 investment advisor regulation, 157–58, KPMG LLP, 229n42 160, 163–64 Kroszner, Randall S. and Philip E. mortgage-backed securities and, Strahan, 190–91 139–42 Kutlich, Lee, 107 SEC registration, 157–58 systemic risk mitigation, 162–63 Lac Vieux Desert Band of Lake Superior venture capital funds, 122, 148, Chippewa Indians, 178 157–58, 211 Lagarde, Christine, 85 Investor Protection and Securities Lamberts, Philippe, 150–51 Reform Act of 2010, 163–67 Lane, Philip R, 210 Iowa, 4–5, 9, 32, 36, 132, 177–78 La Porta, Rafael, Florencio López de IS-LM framework, 66, 67 Silanes, Andrei Shleifer, and Robert Italy, 1, 17, 32, 34, 39–40, 45, 83, 92, Vishny, 206 182, 193, 208 Latin America region, 75, 109, 134, 188, 202, 204 Jackson administration, 7 Latin Monetary Union, 17 Japan, 67, 93, 182, 202, 206–7, 215 Legal Tender Act of February 1862, Japanese Planning Agency, 66–70 14–15 Jayaratne, Jith and Philip Strahan, 190, Lehman Brothers, 139, 140–41 191, 192 Leon, Richard, 172 Jayson, Seth, 135–36 Lerner Index, 205 Jefferies LLC, 61 leverage ratios, 184 Johnson, Simon, 174–75 Levin, Carl, 130, 159 Johnson administration, 91, 101 Levine, Ross, 186, 187–88, 189, John Warner National Defense 191 Authorization Act of 2007, 178 Levine, Ross and Sara Zervos, JP Morgan Chase, 139–40, 143, 171, 188, 191 172, 184, 208 Lewis, Michael, 85 JP Morgan Securities LLC, 61 Liberty Loan bonds, 73–74 Lincoln Provision, 161–62 Kansas, 4–5, 32, 36, 177–78 Lincoln Savings and Loan Association Karceski, Jason, Steven Ongena, and of Irvine, 105 David C. Smith, 193 LINK project, 67 Keating, Charles, 105 liquidity, 3, 182–83 Keating Five, 105–6 List, Friedrich, 16 Keeley, Michael C., 41, 85, 204 loan markets Kelemen, Daniel R. and Eric C. deregulation and, 192–93 Sibbitt, 206 globalization and, 209 Kennedy administration, 86, 91 interest rate regulation, 175–77 Kentucky, 177–78 loan-to-deposit ratios, 42 Khan, Mohsin S. and Abdelahak S. payday loans, 175–78 Senhadji, 188 predatory lending, 135–36, 173, Kim, Jim Yong, 85 179–81 Index ● 273

rural/urban banks and, 3 Minnesota, 4–5, 11, 32, 36, 37–38 subprime lending, 101, 109, 136–37, Mishkin, Frederic S., 65 140–41, 142, 179–81 Mississippi, 11–12, 177–78 see also mortgage markets Missouri, 4–5, 12, 26, 32, 36, 37–38, London, Paris, and American Bank (CA), 90–91, 177–78 30 Mitsubishi Financial Group, 142 London Interbank Offered Rate (Libor), MIT–University of Pennsylvania–Social 142, 171–72 Science Research Council models Louisiana, 9, 11–12, 147, 177, 178, 192 (MPS models), 66–67, 69 Lucas, 67–68 Mizuho Securities USA Inc., 61 Modigliani, Franco, 66 Madison, James, 2, 47–48, 54 Monetary Control Act of 1980, 80, 87, Madoff, Bernie, 163 104 Magnuson Act of 1943, 27 monetary unions, 17 MailRail, 224n6 Montana, 4–5, 33, 36, 37–38, 177–78 Maine, 5, 33, 177–78 Moore, Gwendolynne, 173 Marshall, James Wilson, 27 Moore Amendment, 173 Marshall Plan, 27, 92 Morgan, Donald, Bertrand Rime, and Marsh & McLennan, 167–68 Philip Strahan, 189, 191–92 Martin, Paul, 182 Morgan, J. P., 3, 4, 50–51 Martin, William McChesney, 64 Morgan Stanley & Co. LLC, 4, 61, 120, Maryland, 11–12, 32, 106, 177–78 139, 141–42, 143, 184 Massachusetts, 7, 9, 13, 33, 36, 37–38, mortgage markets 177–78 adjustable-rate mortgages, 4, 135–36, McCulloch, Hugh, 14 145, 179–80, 234n64 McCulloch v. Maryland (1819), 2, 48 Asset-Backed Securitization Process, McFadden Act of 1927, 4–5, 32, 33, 166–67 36–37, 87 credit-related insurance products, 173 McLaughlin, Susan, 189–90 Dodd-Frank Act and, 170–72, MCM models (multicountry models), 66, 179–81 67, 69 early development of, 98–99 Mellon, Andrew, 77 government-sponsored enterprises, 99, Mellon Financial Corporation of 101, 140, 160 Pittsburgh, 24 housing legislation, 99–101 Mengle, David, 41 interest rates setting, 177 Merchant's Bank of New York City predatory lending, 135–36, 173, (1804), 25 179–81 Merkley, Jeff, 159 redlining, 100–101 Merrill Lynch, Pierce, Fenner & Smith securitization, 136–37 Incorporated, 61, 139, 191 subprime lending, 101, 109, 136–37, MetLife, 142 140–41, 142, 179–81 Mexican-American War, 27 underwriting discrimination/redlining, Mexico, 182, 204 100–101 Michigan, 7–8, 9–10, 11–12, 29, 36, see also housing markets 177–78 Mortgage Reform and Ant-Predatory Middle East region, 152 Lending Act of 2010, 179–81 Midwest region, 36, 196 Motter, David C., 40, 42 Minder, Thomas, 150 Moynihan, Brian, 161 Minier, Jenny A., 188 MPM model, 69 274 ● Index

MPS models (MIT–University New Frontier programs, 91 of Pennsylvania–Social Science New Hampshire, 33 Research Council models), payday loans, 177–78 66–67, 69 New Jersey, 7, 11–12, 33, 177–78 Mundell-Fleming model, 67 New Mexico, 33, 177–78 municipal bonds, 5–6, 159–61 New Netherland Company, 21 Mylan Pharmaceuticals, 166 Newton, Isaac, 16–17 New York National Aeronautics and Space automatic chartering system, 25 Administration (NASA), 90 bank failures, 10, 33 National Australia Bank, 208 banking market growth, 194–95 National Bank Acts of 1863, 2, 14–15, bankruptcy laws, 132 26, 35 branch banking, 36, 194–95 National Bank Acts of 1864, 2, 26, 35 central banking development, 24–26 national banking system as central reserve city, 26 branch banking and, 33, 36–37 debt defaults, 11–12 deregulation and, 2, 3, 5 early bank growth, 32 dual banking system, 3 early central banking in, 23–26 federal charters of, 2 early settlement and growth of, 21–23 home mortgage loans and, 14 Evacuation Day, 22 interstate banking and, 5 Federal Open Market Committee, mandatory Federal Reserve System 37–38 membership, 3 Federal Reserve Bank of New York, rural areas and, 35–36 26, 59–61, 63, 64, 123 state banking and, 35 free banking era and, 7, 8–9, 11 uniform currency, 14–15 immigration through, 22 unit banking and, 35 international banking, 202–5 National Bank Supervisor, 148 New York Safety Fund, 14 National Credit Union Administration, out-of-state bank holding companies 131, 153, 157, 167 and, 5 National Futures Association, 228n21 payday loans, 177–78 National Housing Act of 1934 (Capehart rural banks, 26 Act), 79–80, 99 specie-to-banknote ratio, 11 National Industrial Recovery Act of 1933 unit banking, 194–95 (NIRA), 81 New York Clearinghouse (1853), 25 National Monetary Commission, 3, New York Safety Fund, 2, 14, 79 50–51, 62 New York Stock Exchange, 2, 8–9, 24, National Recovery Administration, 81 74–75, 122–23, 170, 228n29 National School Lunch and Milk Act if Nixon administration, 88, 90, 93–94, 1946, 89 103 National Science Foundation (NSF), 89 Nolan, Patrick, 105 National Youth Administration, 81 Nomura Securities International, Inc., 61 Navigation Acts (Britain), 16 Nonadmitted and Reinsurance Reform Navigation Ordinance (1651), 16 Act of 2010, 158–59 Nebraska, 4–5, 32, 36, 90–91, 177–78 Norinchukin Bank, 171 Netherlands, 150, 182 North Carolina, 2, 177–78 Nevada, 177–78 North Dakota, 4–5, 33, 36, 177–78 New Deal, 51–56, 63–64, 80–82, 85–87, Norway, 17, 150, 186, 193 99, 101 Novartis, 152 Index ● 275

Obama administration Page, Bacon, & Co. (San Francisco), Consumer Financial Protection Act, 29–30 167–68 Pakonen, Richard R., 39 financial reform platform, 126, 144– Palmer, Cook, & Co. (San Francisco), 45, 148–49, 155, 159, 168, 213 29–30 Great Recession and, 144–45, 148–49 PATRIOT Act (Uniting and Obey, David, 144 Strengthening America by Providing OBRA-93/Omnibus Budget Appropriate Tools Required to Reconciliation Act of 1993 (Deficit Intercept and Obstruct Terrorism Reduction Act of 1993), 112–13 Act of 2001), 88 Office of Fair Lending and Equal Paulson, Henry, 140, 142 Opportunity, 167–68 Pay It Back Act, 178 Office of Financial Education, 169 Payment, Clearing, and Settlement Office of Financial Protection for Older Supervision Act of 2010, 162–63 Americans, 170 payment cards, 172–73 Office of Financial Research, 153 Peace Corps, 91 Office of Service Member Affairs, 170 Peek, Joe and Eric S. Rosengren, 193 Office of the Comptroller of the Currency Peel, Robert, 16, 45 (OCC), 2, 14, 26, 38, 86, 103, 110, Peltzman, Sam, 38 157 Pennsylvania, 9, 11–12, 32, 36, 37–38, Office of the Investor Advocate, 163–64 132, 177–78 Office of Thrift Supervision (OTS), 6, Philadelphia Savings Fund Society 108–10, 146, 148, 156–57 (PSFS), 98 Ohio, 4–5, 7, 10–11, 32, 36, 37–38, 106, Phillips Curve, 66, 67 168, 177–78 Poast, Paul D., 92, 93 oil markets Polakoff, Scott, 110 energy net exportation, 214 Poor, Henry Varnum, 137–38 energy product regulation, 120, Portigon AG, 171 129–30 Portman Square, 160–61 Enron loophole, 130 postal savings banks, 38 oil crisis of 1979, 104 Postal Savings System, 38, 97–98 oil exports, 103 Post Office Railway, 224n6 oil pricing, 65–66, 102, 103–4, 106, postwar economies 123, 138–39 Bank Holding Company Act of 1956, oil shocks, 67, 138 87–88 Standard Oil, 50 banking legislation during, 88–89 trading transactions, 120, 123, 141–42 Bretton Woods system, 67, 84–85, Oklahoma, 4–5, 36, 107, 177–78 92–94 Omnibus Budget Reconciliation Act of economic stability and, 85–87 1993/OBRA-93 (Deficit Reduction Eisenhower administration and, 90 Act of 1993), 112–13 Fair Deal, 89–90 1:12 Initiative for Fair Pay, 231n10 Great Society programs, 91 online banking, 211–12 housing markets, 99–100 Orderly Liquidation Authority, 155–56 New Frontier programs, 91 Oregon, 177–78 stability of, 88–89 Organization for European Economic Co- 3-6-3 rule, 85–87 operation (OECD), 92 US fiscal development, 89–92 Osborne, George, 151 Powell, Jerome, 213 Otoe Missoria Tribe of Oklahoma, 178 Powers, John, 40–41 276 ● Index

President’s Council on Jobs and Rhode Island, 11–12 Competitiveness (2009), 159–60 Ricardo, David, 16 PricewaterhouseCoopers, 229n42 Riegle-Neal Interstate Banking and private equity funds Branching Efficiency Act of 1994, 5, commercial bank investment 114–16, 189–90 regulation, 159–61 Rigel Pharmaceuticals, 166 conflict of interest trading, 160 Rioja, Felix and Neven Valev, 188 deregulation and, 4 risk exposure Volcker Rule and, 5–6, 159–61 deregulation, 4 Private Fund Investment Advisors deregulation and, 102–3 Registration Act of 2010, 157–58 globalization and, 209 proprietary trading, 159, 160–61 leverage ratios, 182–83 Public Broadcasting Act of 1967, 91 liquidity ratios, 182–83 Public Company Accounting Oversight systemically important financial Board, 166–67 institutions, 119, 162–63, 183–84, Public Works Administration, 81 202, 209, 210 systemic banking crises and, 188–89 Rabobank, 172 systemic risk, 148, 162–63 Raguet, Condy, 98 Robinson, Joan, 185 Raiden, Norman, 105 Rolnick, Arthur J. and Warren E. Weber, Rajan, Raghuram G. and Luigi Zingales, 10 186, 195–96, 195–97, 199–200 Romania, 17 Ram, Rati, 187 Romer, Paul, 81 Raskin, Sarah, 213 Roosevelt administration, 37 RBC Capital Markets, LLC, 61 Roosevelt (Franklin) administration, 37, RBS Securities Inc., 61 51–56, 54, 63–64, 80–82, 89 Reagan administration, 4, 92, 104–5, Roosevelt (Theodore) administration, 112 112, 114, 190–91 Rousseau, Peter L. and Paul Wachtel, 186 Real Bills Doctrine, 61–62, 63, 74, 76 Royal Bank of Canada, 171 Red Flags rule, 131 Royal Bank of Scotland, 45, 150, 151, redlining, 100–101 171, 172 regulation Ruggie, John Gerard, 84 deregulation and growth, 189–93 rural markets, 3, 10, 32, 42 impact on economic growth, 191–200 Russell, John, 16 reregulation and, 106, 182–84, 206 Russia, 26, 46, 72, 92, 182 supervisory and regulatory agencies, 156–57 Safety Fund Act (1829), 25 systemically important financial Safety Insurance Group, 166 institutions, 119, 162–63, 183–84, Saiers, Nelson, 161 202, 209, 210 San Francisco Mint (1854), 30–31 Regulation Q, 4, 79, 80, 104 San Marino, 17 Reich, John, 110 Sanwa Bank, 208 Reid, Harry, 155 Sarbanes-Oxley Act of 2002, 130–31 reinsurance companies, 159 Saudi Arabia, 103, 182 reregulation and, 106, 182–84, 206 Savage, James, 98 Resolution Trust Corporation (RTC), 108 savings and loans associations (thrifts), 38, retirement plans, 91, 126, 149, 170 39–40, 95–101, 97–98 Revenue Act of 1861, 15 Savings and Loan Society of San Revenue Act of 1862, 15 Francisco, 29–30 Index ● 277

Savings Association Insurance Fund Smith, Adam, 16, 62 (SAIF), 108–9 Smoot, Reed, 75 Saxon, James, 86 Smoot-Hawley tariff (Tariff Act of 1930), Scandinavian Monetary Union, 17 74, 75 Schapiro, Mary, 164 Snyder, John, 64 Schranz, Mary S., 190 Social Security Act of 1935, 81, 90 Schumpeter, Joseph A., 185, 186, 187, South Africa, 19, 182 205 South American region, 22, 27, 28, 204 Schwartz, Anna, 75, 76–77 South Carolina, 32, 33, 177–78 Schweiger, Irving and John S. McGee, 37, South Dakota, 33, 132, 177–78 40, 42 South Korea, 182 Second Bank of the United States (1816), Space Race, the, 90 2, 7, 25, 35, 48 Spain, 17, 39–40, 150, 204 Second Legal Tender Act of July 1862, 15 specie Second World War, 64, 80–82, 83–85 banknotes backed by specie, 8–11, 12, Securities Act of 1933, 161, 163 13 Securities and Exchange Commission financial panic of 1837, 25 (SEC), 60, 104, 117, 137, 146, price-specie-flow mechanism, 18 148–49, 153, 157–58, 163–64, speculative investments 165–67, 206 Great Depression and, 74–76 Securities Exchange Act (1934), 163, Volcker Rule and, 5–6, 159–61 165 Spieker, Ronald, 190 securities exchanges state banking asset-backed securities, 149, 166, 210 branch banking and, 33, 38 Asset-Backed Securitization Process, commercial bank charters, 2 166–67 conversion to national banks, 15 government-sponsored enterprises, 99, dual banking system, 3 101, 140, 160 federal debt and, 11 mortgage-backed securities and, Federal Deposit Insurance Corporation 139–42 Improvement Act of 1989, 5 systemic risk mitigation, 162–63 Federal Reserve System membership, 3 Securities Investor Protection Corporation free banking era, 11–13, 15 (SIPC), 156 home mortgage loans and, 14 Security-First National Bank (CA), 32 interstate banking, 4–5 Seidman,William, 108, 226n32 intrastate branching, 189–91, 196–97 September 11 attacks, 122–25 national banks and, 35 Serbia, 17 restrictions on branch banking, 4–5, Servicemen's Readjustment Act of 1944 32, 33, 36–37, 87 (GI Bill), 99, 100 state charters, 35–36 SG Americas Securities, LLC, 61 unit banking, 4–5 shareholder rights, 149, 150–51, 153, State Street Corporation, 184 155–56, 166, 206, 208–9 Steagall, Henry, 78 Sharma, Sutesh, 160–61 Stein, Jeremy, 213 Shehzad, C. T., Jakob de Haan, and Bert Sterling Bancorp, 166 Scholtens, 40 stimulus bill (American Recovery and Shen, Chung-Hua and Chien Chiang Reinvestment Act of 2009), 144–45, Lee, 187 149, 152, 178 Slager, Alfred, 208 Stiroh, Kevin J. and Philip E. Strahan, small banks, 36 192 278 ● Index

Strategic Arms Limitation Talks I (SALT 3-6-3 rule, 85–87 I), 93 Tood & Co. (San Francisco), 29–30 Suffolk Bank (Boston), 13 Towns, Edolphus, 164 Sveriges Riksbank (1668), 1, 43–44 Treasury bonds, 5–6, 15, 26, 62, 118, swap markets, 119–20, 142, 146, 154, 123, 159–61, 214 160, 161–62, 163, 171–72 Treasury-Fed Accord of 1951, 64 Sweden, 17, 182 Tressel, Thierry, 186 Switzerland, 17, 150, 152, 182, 231n10, Troubled Asset Relief Program (TARP), 234n67 141–42, 143–44, 154, 178 Truman administration, 64, 89–90, 100 Taiwan, 92, 93 Tschoegl, Adrian E., 208 Talent-Nelson Amendment, 178 Turkey, 182 targeting, 65–66 Tariff Act of 1930 (Smoot-Hawley tariff), UBS Securities LLC, 61, 150, 171, 172 75 Uniform Small Loan Law of 1916, 177 TARP (Troubled Asset Relief Program), unit banking 141–42, 143–44, 154, 178 use of term, 35 Tarullo, David, 174, 213 bank failures and, 33 taxes banking market growth, 194–95 bank taxes, 25 bank profitability, 39–40 earned income tax credits, 112–13, bank size/costs, 39–42 144, 169 branch banking vs., 35 income tax, 2, 15, 91, 112–13, debt and, 39 125–26, 129, 144, 169, 196 free banking system and, 12 short term/long term gain contracts, growth of unit banks, 35–37 181 impact of branch banking on, 33 on state vs. national banks, 2 interest rates, 42 2001 tax cuts, 125–26 loan-to-deposit ratios, 42 2003 tax cuts, 26 national banks and, 35 Taxpayer Relief Act of 1997, 114 state banks and, 4–5 Tax Reform Act of 1981, 104 United Kingdom, 39–40, 67, 85, 150–51, Taylor, John B., 67–68 171–72, 182, 186, 206–7, 208 Taylor Rule, 67–68 United States technology in banking, 211–12 bimetallic standard, 16 Telecommunications Act of 1996, 121 as creditor nation, 71–72, 92, 214–15 Tennessee, 7, 81, 177–78 gold standard and, 15–19, 51–52, Tennessee Valley Authority (TVA), 81 63–64, 72–73, 74, 76, 77, 84 Texas United States Code of Law, 167, 233n43 branch banking, 194–95 United States Housing Authority, 100 early bank growth, 32 urban markets, 3, 42 Federal Open Market Committee, Uniting and Strengthening America 37–38 by Providing Appropriate Tools international banking, 202–5 Required to Intercept and Obstruct payday lending, 177–78 Terrorism Act of 2001 (USA restrictions on branch banking, 36 PATRIOT Act), 88 unit banking, 32, 194–95 Utah, 26, 57, 112, 177–78 The Travelers Group, 4, 118 Third Legal Tender Act of March Van Buren, Martin, 25 1863, 15 Van der Starr, Cornelius, 109 Index ● 279

Vander Vennet, R., 207–8 Warren, Elizabeth, 167, 168 Vasella, Daniel, 152 Washington (state), 177–78 venture capital funds, 122, 148, 157–58, Washington Mutual (WaMu), 110 211 Watt, Melvin, 172 Vermont, 7, 11–12, 33, 177–78 Weintraub, Robert E. and Paul F. Jessup, Vietnam, 93 42 Virginia, 4–5, 12, 32, 37–38 Wells, Fargo, & Co., 29–30, 143 Vogel, Steven, 207 Wernette, John Phillip, 33 Volcker, Paul, 66, 114, 159, 212–13 West Virginia, 4–5, 36, 177–78 Volcker Rule, 5–6, 159–61 White, Harry Dexter, 84 Volunteers in Service to America, 91 wildcat banking, 9–10, 29 Voting Rights Act of 1965, 91 Williamson, Stephen D, 189 Wilson (Woodrow) administration, 3, 18, Wagner-Steagall Act (Housing Act of 52, 54, 112 1937), 100 Wisconsin, 4–5, 7, 11, 12, 36, 177–78 Wall, Howard J., 191 World Bank, the, 85 Wall Street Reform and Consumer World Trade Organization, 85 Protection Act of 2009 (HR 4173), Wurster, Catherine Bauer, 100 147–49 Wyoming, 4–5, 36, 177–78 Wall Street Transparency and Accountability Act of 2012, 161–62 Yahoo!, 166 Walsh, Carl E., 65–66 Yellen, Janet L., 58, 212–14 Walter, John R., 86 Yokohama Specie Bank (CA), 30