| Title |
Date |
Publication |
Author(s) |
Type |
| Stamp Scrip: Money People Paid to Use
|
April, 2008 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Bruce A Champ; |
Economic Commentary |
| Abstract: Substitutes for government-issued money are produced and used from time to time even in countries like the United States. Understanding why people turn to these substitutes and to what degree they are successful—or not—can teach us a lot about the elements essential to a well-functioning currency.
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| The National Banking System: A Brief History
|
December, 2007 |
Federal Reserve Bank of Cleveland, Working Paper no. 0723 |
Bruce A Champ; |
Working Papers |
| Abstract: During the period of the National Banking System (1863?1913), national banks could issue bank notes backed by holdings of eligible U.S. government securities. This paper presents an overview of the legal and financial history of this period. It begins with the reasons the National Banking System was created. It also examines the rules of operation for national banks as established by the National Banking Act and its subsequent revisions. Furthermore, the paper serves as a brief financial history of the period, examining the various forces that shaped the environment in which national banks operated.
This paper represents a preliminary chapter from a forthcoming monograph on the period of the National Banking System. Other chapters of the monograph will appear in the Federal Reserve Bank of Cleveland's working paper series.
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| The National Banking System: The National Bank Note Puzzle
|
December, 2007 |
Federal Reserve Bank of Cleveland, Working Paper no. 0722 |
Bruce A Champ; |
Working Papers |
| Abstract: The era of the National Banking System (1863?1913) has been a puzzling one for monetary theorists and economic historians for well over a century. The puzzles associated with this period take various forms. Despite calculations of high profit rates on note issue for certain periods of the era, national banks never fully utilized their note-issuing powers. Relatedly, the behavior of interest rates during the period is also puzzling given the regime of bank note issuance put in place by the National Bank Acts. On the surface, it appears that an arbitrage condition is broken. The observed inelasticity in aggregate national bank note issue also is puzzling, particularly given the behavior of interest rates. This paper examines many of the puzzles of the national banking era and provides a summary of the current attempts to explain those puzzles.
This paper represents a preliminary chapter from a forthcoming monograph on the period of the National Banking System. Other chapters of the monograph will appear in the Federal Reserve Bank of Cleveland's working paper series.
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| The National Banking System: Empirical Observations
|
December, 2007 |
Federal Reserve Bank of Cleveland, Working Paper no. 0719 |
Bruce A Champ; |
Working Papers |
| Abstract: This paper provides a summary of the main features of U.S. fi nancial and banking
data during the period of the National Banking System (1863?1914). The
purpose of the paper is to provide an overview of the stylized facts associated
with the era, with an emphasis on those impinging on national bank behavior.
The paper takes a detailed look at key elements of national bank balance sheets
over time, over the seasons, and during panic periods. The interesting and puzzling
patterns of interest rate movements during the era also are examined. The
paper introduces a new set of disaggregated data on the national bank era that
has not been examined by prior research. As data are presented in the paper,
some of the key puzzles associated with the era are introduced.
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| Private Money in our Past, Present, and Future
|
January, 2007 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Bruce A Champ; |
Economic Commentary |
| Abstract: The government isn't the only entity allowed to issue money. Private citizens and businesses can too, and throughout U.S. history, they often have. But private money--as such money is called--isn't issued much these days. What lessons have our
experiences with private money taught us, and what do they imply for our money today and in the future?
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| National Bank Notes and Silver Certificates
|
December, 2006 |
Federal Reserve Bank of Cleveland, Working Paper no. 0622 |
Bruce A Champ; James B Thomson; |
Working Papers |
| Abstract: From 1883 to 1892, the circulation of national bank notes in the United States fell nearly 50 percent. Previous studies have attributed this to supply-side factors that led to a decline in the profitability of note issue during this period. This paper provides an alternative explanation. The decline in note issue was, in large part, demand-driven. The presence of a competing currency with superior features caused the public to substitute away from national bank notes.
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| Inflation, Banking, and Economic Growth
|
May, 2006 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Bruce A Champ; John Boyd; |
Economic Commentary |
| Abstract: The world has seen a dramatic decline in inflation rates in recent decades, but concerns about inflation may still be warranted, especially in some countries. Evidence is mounting that inflation is harmful to economic activity even at fairly modest rates of inflation because of the way it adversely affects the banking sector and investment.
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| Inflation and Financial Market Performance: What Have We Learned in the Last Ten Years?
|
December, 2003 |
Federal Reserve Bank of Cleveland, Working Paper no. 0317 |
Bruce A Champ; John Boyd; |
Working Papers |
| Abstract: The last decade has witnessed a great deal of theoretical and empirical research on the relationships between inflation, financial market performance, and economic growth. This paper provides a survey of that literature and presents new cross-country empirical results on this topic. We find that inflation is negatively associated with banking industry size, real returns on financial assets, and bank profitability. We also discover a positive relationship between asset return volatility and inflation.
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| Resolving the National Banking System Note-Issue Puzzle
|
December, 2003 |
Federal Reserve Bank of Cleveland, Working Paper no. 0316 |
Bruce A Champ; Neil Wallace; |
Working Papers |
| Abstract: Under the National Banking System, 1863-1914, national banks that deposited sufficient collateral could issue notes provided they paid a tax on notes in circulation: 1 percent per year before 1900 and 1/2 percent thereafter. Because note issue was far below the allowed maximum, an arbitrage argument predicts that short-term nominal interest rates should have been bounded above by the tax rate. They were not. That is the note-issue puzzle. Our resolution takes the form of a model in which notes play a role, but in which the profitability of note issue is not tied to anything that resembles a market rate of interest.
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| Open and Operating: Providing Liquidity to Avoid a Crisis
|
February, 2003 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Bruce A Champ; |
Economic Commentary |
| Abstract: The terrorist attacks of 9/11 triggered a staggering increase in demand for U.S. dollars all over the world, a demand that threatened to disrupt the American payments system but was met swiftly and successfully by the Federal Reserve. Earlier in the nation’s history, the system didn't respond so well to severe shocks. This Commentary describes financial crises that occurred during one period in which the country had no central bank.
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| Fear and Loathing of Central Banks in America
|
June, 2002 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Bruce A Champ; Michael F Bryan; |
Economic Commentary |
| Abstract: The Federal Reserve System is America’s uneasy compromise between our wariness of concentrated financial power and our desire to promote efficiency in our national payments system. In fact, the Federal Reserve is the nation’s third attempt to establish a large national bank—what we now call a central bank— that is in a unique position to influence a nation’s money and credit. This Commentary retells the story of the rise and fall of the two earlier national banks, both named the Bank of the United States.
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| Who Is that Guy on the $10 Bill?
|
June, 2000 |
Federal Reserve Bank of Cleveland, Economic Commentary |
Bruce A Champ; Michael F Bryan; Jennifer K Ransom; |
Economic Commentary |
| Abstract: Alexander Hamilton is the least known and most misunderstood of our nation’s founders. His contributions include creating a monetary standard, establishing our banking system, and ensuring the young nation’s creditworthiness. This Economic Commentary explains how much of our financial strength we owe to Hamilton.
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| Resolving the National Bank Note Paradox
|
April, 1992 |
Federal Reserve Bank of Minneapolis Quarterly Review, Spring 1992, pp. 13-21 |
Bruce A Champ; Neil Wallace; Warren E Weber; |
Economic Review |
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