; ; ; "ActiveFedora::Aggregation::ListSource" . a , ; "Bank Liability Insurance Schemes Before 1865"; ; "batchuser@example.com"; "Weber, Warren E."; "Federal Reserve Bank of Minneapolis"; "Moral hazard", "Banknotes", "Deposit insurance"; "E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems", "N21 - Economic History: Financial Markets and Institutions: U.S.; Canada: Pre-1913"; "Prior to 1861, several U.S. states established bank liability insurance schemes. One type was an insurance fund. Member banks paid into a state-run fund that paid bank creditors’ losses. A second scheme was a mutual guarantee system. Member banks were legally responsible for the liabilities of any insolvent bank. This paper’s hypothesis is that the moral hazard problem was controlled under a scheme to the degree that member banks had the power and incentive to control or modify others’ risk-taking behavior. Schemes that gave member banks both strong incentives and power were able to control the moral hazard problem better than schemes in which one or both features were weak. Empirical evidence on bank failures and losses on banks’ asset portfolios is consistent with this hypothesis. "^^; "2011-12-02"; "2019-06-24T18:53:47.701748812+00:00"^^; "https://doi.org/10.21034/wp.679"; ; "https://creativecommons.org/licenses/by-nc/4.0/"; "Wed Oct 23 17:48:23 2019"; "https://creativecommons.org/licenses/by-nc/4.0/"; "Research Paper"; "832"; "Working paper (Federal Reserve Bank of Minneapolis. Research Department)"; "679"; "Deposit insurance", "Banknotes", "Moral hazard"; ; ; ; ; "Federal Reserve Bank of Minneapolis. Research Department"; ; "Publication" . ; .