Laissez-faire Banking

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Psychology Press, 1996 - Business & Economics - 380 pages

The idea of free (or laissez-faire) banking has enjoyed a remarkable renaissance in recent years. It is a novel idea that challenges much of what many banking scholars still take for granted - that banking is inherently unstable, that the banking system needs a lender of last resort or deposit insurance to defend it in a crisis, and that the Government has to protect the value of the currency. Against this free banking sets an argument which is in essence very simple: if markets are generally better at allocating resources than governments, then what is different about money and the industry that provides it and why? "Laissez-Faire Banking" is divided into three inter-related sections, dealing with the theory of free banking, historical experiences of it and present-day monetary and banking reforms based on free banking principles.

 

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Contents

Introduction
1
Free banking theory
23
Automatic stabilizing mechanisms under free banking
25
Option clauses and the stability of a laissezfaire monetary system
41
Monetary freedom and monetary stability
58
Is banking a natural monopoly?
76
Models of banking instability
87
Historical experience
115
The evolution of central banking in England 18211890
221
The evolution of central banking in England a reply to my critics
248
Monetary and banking reform
253
Stopping inflation
255
Does Europe need a Federal Reserve System?
265
Evaluating the hard ecu
281
The US banking crisis the way out
292
Notes
319

Free banking in Australia
117
US banking in the free banking period
149
Money and banking the American experience
180
Did central banks evolve naturally?
207

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About the author (1996)

Kevin Dowd is Yorkshire Bank Professor of Financial Economics at Sheffield Hallam University.

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