Legislating Instability: Adam Smith, Free Banking, and the Financial Crisis of 1772 - Hardcover

Goodspeed, Tyler Beck

Hardcover

ISBN 10: 0674088883 ISBN 13: 9780674088887

Verlag: Harvard University Press, 2016

Inhaltsangabe

From 1716 to 1845, Scotland’s banks were among the most dynamic and resilient in Europe, effectively absorbing a series of adverse economic shocks that rocked financial markets in London and on the continent. Legislating Instability explains the seeming paradox that the Scottish banking system achieved this success without the government controls usually considered necessary for economic stability.

Eighteenth-century Scottish banks operated in a regulatory vacuum: no central bank to act as lender of last resort, no monopoly on issuing currency, no legal requirements for maintaining capital reserves, and no formal limits on bank size. These conditions produced a remarkably robust banking system, one that was intensely competitive and served as a prime engine of Scottish economic growth. Despite indicators that might have seemed red flags―large speculative capital flows, a fixed exchange rate, and substantial external debt―Scotland successfully navigated two severe financial crises during the Seven Years’ War.

The exception was a severe financial crisis in 1772, seven years after the imposition of the first regulations on Scottish banking―the result of aggressive lobbying by large banks seeking to weed out competition. While these restrictions did not cause the 1772 crisis, Tyler Beck Goodspeed argues, they critically undermined the flexibility and resilience previously exhibited by Scottish finance, thereby elevating the risk that another adverse economic shock, such as occurred in 1772, might threaten financial stability more broadly. Far from revealing the shortcomings of unregulated banking, as Adam Smith claimed, the 1772 crisis exposed the risks of ill-conceived bank regulation.

Über diesen Titel

Über die Autorin bzw. den Autor

Tyler Beck Goodspeed is a Junior Fellow in Economics at the University of Oxford.

Details zur Ausgabe

• Verlag: Harvard University Press
• Erscheinungsdatum: 2016
• Sprache: Englisch
• ISBN 10: 0674088883
• ISBN 13: 9780674088887
• Einband: Tapa dura
• Anzahl der Seiten: 224
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: Amazon EU Sarl; 0; www.amazon.com; ; 38 Avenue John F. Kennedy; Luxembourg; 0; L-1855; Luxemburg