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Presents an overview and summary of papers presented at the conference held at the Federal Reserve Bank of New York which tackled issues regarding disclosure and market discipline in the banking industry. Interaction between supervisor examinations and market discipline; Relationship between bank disclosure and stock price volatility; Indicators for the determination of troubled banks.

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The article discusses examples of birds in art created for bank notes by American artist and naturalist John James Audubon (1785-1851), first referred to in Audubon's diary on July 12, 1824. The authors refer to the historiography of Audubon scholars such as Alice Ford, William H. Dillistin, and Richard Rhodes who began searching for Audubon's first engraved illustration of a bird designed for American paper money in the 1950s. The diary entry refers to a grouse created for Gideon Fairman (1774-1827), a principal of Fairman, Draper, Underwood & Co. of Philadelphia, Pennsylvania (1823-1830), an engraving firm specializing in the printing of bank notes for financial institutions. The authors uncovered a specimen sheet for the company featuring a running grouse designed by Audubon.

Between 1862 and 1878, the view of the United States government towards the nation's money was transformed. Early in the Civil War, the government got into the bank note printing business out of necessity, printing and issuing the first-ever federal currency. Over the following years, debates raged whether the national currency should be printed privately or by the government's bank note printer, the United States Bureau of Engraving and Printing (BEP). Matters came to a head in 1878 when Congress debated the future of the BEP. That year, in a radical departure from the past, Congress gave the Bureau of Engraving and Printing a monopoly on the production of currency, forever changing the role of the government in the nation's economy. Money, be it in the form of coin or currency, was now the exclusive province of the government – not private banks or bank note companies. This change was the result of a rare consensus between Democrats and Republicans and between the forces of the antimonopoly tradition, Greenbackism, and hard money. For various reasons, they were unanimous in believing that the government, especially Congress, should be in control of those matters affecting the monetary affairs of the country. [ABSTRACT FROM PUBLISHER]

The author comments on articles by economics Greenbaum and Haywood (G&H) and Bloch concerning the major factors that must be considered in analyzing changes in the financial sector and their resulting impact on the economy. He states that G&H argue that demand for financial assets is dependent on standard variables, income, interest rates, and more. He suggests that G&H didn't delve far enough into government policy on the financial sector and states his belief that the introduction of large quantities of U.S. Treasury Bills is the most important financial innovation from 1940-70. He states that Bloch's view of the U.S. Federal Reserve's behavior is instructive, and said that while he doesn't question Bloch's analysis, he does question if the reasons are correct.

Explores how the banks chartered by states in the United States (U.S.) provide a source of flexibility in state public finance following the decision of the U.S. Constitution to remove the states' power to issue paper money. Role of investment earnings and tax revenues derived from banks in state public finance; Importance of state-bank relationships to public finance.

In this paper, we attempt to study the effectiveness of various simple machine learning methods in the prediction of bank failures. From a raw dataset of 10,938 US banks during the period of 2000–2020, we find that machine learning approaches do not really outperform the benchmark of conventional statistical method, logistic regression. However, using PCA to retain relevant variance in variables significantly improve the performance of machine learning methods and raise the out-of-sample accuracy of those method to over 70% to over 80%. Of all the machine learning methods used in this paper, the simple KNN seems to be the best model in forecasting bank failure in the United States. [ABSTRACT FROM AUTHOR]

Empirical studies and much marketplace opinion have it that the spread between private money market rates and the U.S. Treasury bill rate of comparable maturity is due to differential default risk, liquidity risk, and relative supplies. This paper presents an argument and empirical evidence that the bulk of the systematic and medium-term differential between privates rates---in this case, domestic CDs, commercial paper, bankers' acceptances, and Eurodollar CDs---and the T-bill rate is due to the exemption of interest on Treasury securities from state and local taxation. In the case of Eurodollar CDs, the additional and major systematic factor explaining the spread (visa vis T-bills) is the exemption of Eurodollar CDs from the Federal Reserve's "tax" via reserve requirements. An empirical section confirms the role of standard default risk, liquidity risk, and market "absorption" variables in determining short-term deviations from tax-adjusted parity. The tax-adjusted parity condition, however, remains the major systematic and medium-term determinant---certainly more important than has been suggested previously in the literature. [ABSTRACT FROM AUTHOR]

The article addresses the democratization of money. The author equates the economic importance of the use of checks or deposit currency with the ability to physically distribute goods through railways. The author considers government intervention into the regulation of deposit currency, as it is beginning to replace the use of currency and coins, which are provided to the public free of charge. The author argues against the criticism that this is a socialization of the banking system by stating that this subsidy would take the place of the costs of generating paper currency and coins, and would strengthen the banking system by the increase in individual bank business.

Comments on an article about private banking in the United States. Discussion on the work of economist Herman Kross; Details of economic history; Perception on the role of private bankers.

Comments on articles about economic and business history in the United States. Details of private banking; Views on capital accumulation.

This article examines the practice of the federal reserve banks in requiring eligible or near-eligible paper as so-called "marginal" or "additional collateral," to paper discounted by them, in contradistinction to advances on member bank' notes payable collateraled by United States securities or eligible paper. As a setting for collateraled discounts, the history and purposes of collateraled advances are stated, as well as the reasons for the ascendancy of such advances over discount. In their publications the federal reserve authorities fail to acknowledge any difference between (1) rediscounting and (2) allowing advances against eligible paper pledged; nor do they report separately the absolute or relative amount of discounts to which "additional collateral" is required, nor the "margin" required, nor the number of members putting up such margins, nor any other data relative thereto. There are no provisions in the Federal Reserve act or regulations for the practice; and yet it is no mean method of credit control. The reasons offered by the reserve banks for the practice are: (1) to repress excessive borrowing by the applicant member, in the Interest of the reserve bank, of the applicant member, or of the system as a whole, using this device as a supplement to credit rationing, discount rate variation, and moral suasion; (2) to increase the protection to the reserve banks themselves for credits granted; (8) to compensate for the less rigid insistence by the reserve banks on technical qualifications in credit granting and thus to make possible greater extensions of credit to members than can be had on the strict merit of the paper offered for discount; and (4) to acquiesce in greater degree to the traditional methods of Inter-bank finance and to break down the isolation of the reserve banks from the business and financial world. Each of these reasons is examined and criticized. [ABSTRACT FROM AUTHOR]

The article analyzes the factors that helped Canada escape from the effect of prolonged silver agitation in the U.S. despite a strong commercial dependence of the nation on the U.S. The silver agitation was aimed at abolishing the silver certificate currency notes to save money on paper. Financial causes like solidarity of the banking system is held responsible for the reproduction of the same commercial and financial conditions in the two countries. Emergence of local branches of the banks in Canada has not only ensured security to the community, but also resulted risk management at local level.

The article criticizes the U.S. banking system for its failure to adapt to the present requirements of the country. The banking system failed to provide uniform bank note currency throughout the country. The banking system failed to provide a return flow of notes under the effective plan of redemption due to circumstances under which the laws pertaining to the national banks were passed. The lack of investments in U.S. bonds and confining capital in a non-banking security are serious problems in the functioning of the banking system.

This article presents the speech delivered at the Chicago Forum of the American Institute of Banking. The speech focuses on the banking behavior of deposit. It is as a dealer in debts, then, that we look for the peculiarity and economic functions of banks. It has, of course, often been pointed out that the funds owed depositors have the characteristic of being, either by law or custom, payable on demand. In addition, however, a portion of the debts banks owe, namely, checking accounts, have a peculiarity that is shared only by debts in the form of Government or bank notes--they serve as the medium of exchange, or money, of the community.

The relationship between an individual's financial behavior and financial satisfaction is well known. Less evidence is available about how these two constructs interplay within couples. This considered, the current paper aims to (a) examine whether individuals' financial satisfaction is influenced by their own financial behavior (actor effect) and their partner's financial behavior (partner effect); (b) examine whether these two effects vary between husbands and wives; and (c) verify how couples' bank account status (i.e., only joint bank accounts, only separate bank accounts, both joint and separate bank accounts) moderate these effects. The current study draws 1,475 heterosexual early married couples from Couple Relationships and Transition Experiences study and modeled dyadic data through an Actor Partner Interdependence Model. Results indicate that actor's financial behavior is associated only with one's own financial satisfaction (actor effect) and not one's partner's financial satisfaction (partner effect). This holds for both wives and husbands. Furthermore, individuals who hold only joint bank account(s) are more likely to have financial behaviors similar to their partner than individuals who hold only separate bank accounts or both joint and separate accounts. Couples who hold only separate accounts are more likely to engage in less positive financial behavior than their counterparts. Implications for relationship therapists and financial professionals are discussed. [ABSTRACT FROM AUTHOR]

Using the near universe of U.S. consumer credit cards, we show that banks transmit their wholesale funding shocks to consumers by reducing their credit card limits. Credit-constrained consumers who are unable to hedge against the transmitted shock by accessing other credit cards experience a stronger and more persistent reduction in aggregate credit card limits at the consumer level. Consequently, these credit-constrained consumers reduce their aggregate credit card borrowing. Our results document a credit card lending channel for the transmission of adverse bank shocks and show who bears the costs of fragile bank funding structures. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]