Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England

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Cambridge University Press, Aug 28, 1996 - Business & Economics - 194 pages
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Today the term "insider lending" conveys an aura of abuse and corruption, of unethical, if not illegal, behavior. In early nineteenth century New England, however, insider lending was an integral aspect of the banking system. Not only was the practice an accepted fact of economic life, but, as Naomi R. Lamoreaux argues, it enabled banks (at least in this particular historical context) to play an important role in financing economic development. As the banking system evolved over the course of the century, however, lending practices became more impersonal and professional.
 

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Contents

Vehicles for accumulating capital
11
Insider lending and Jacksonian hostility toward banks
31
Engines of economic development
52
The decline of insider lending and the problem of determining creditworthiness
84
Professionalization and specialization
107
The merger movement in banking
133
Conclusion
157
Index
166
Copyright

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