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A sweeping look at the evolution of commercial banks over the past two centuriesCommercial banks are among the oldest and most familiar financial institutions. When they work well, we hardly notice; when they do not, we rail against them. What are the historical forces that have shaped the modern banking system? In
Unsettled Account, Richard Grossman takes the first truly comparative look at the development of commercial banking systems over the past two centuries in Western Europe, the United States, Canada, Japan, and Australia. Grossman focuses on four major elements that have contributed to banking evolution: crises, bailouts, mergers, and regulations. He explores where banking crises come from and why certain banking systems are more resistant to crises than others, how governments and financial systems respond to crises, why merger movements suddenly take off, and what motivates governments to regulate banks.
Grossman reveals that many of the same components underlying the history of banking evolution are at work today. The recent subprime mortgage crisis had its origins, like many earlier banking crises, in a boom-bust economic cycle. Grossman finds that important historical elements are also at play in modern bailouts, merger movements, and regulatory reforms.
Unsettled Account is a fascinating and informative must-read for anyone who wants to understand how the modern commercial banking system came to be, where it is headed, and how its development will affect global economic growth.
About the author
Richard S. Grossman
Summary
A sweeping look at the evolution of commercial banks over the past two centuries
Commercial banks are among the oldest and most familiar financial institutions. When they work well, we hardly notice; when they do not, we rail against them. What are the historical forces that have shaped the modern banking system? In Unsettled Account, Richard Grossman takes the first truly comparative look at the development of commercial banking systems over the past two centuries in Western Europe, the United States, Canada, Japan, and Australia. Grossman focuses on four major elements that have contributed to banking evolution: crises, bailouts, mergers, and regulations. He explores where banking crises come from and why certain banking systems are more resistant to crises than others, how governments and financial systems respond to crises, why merger movements suddenly take off, and what motivates governments to regulate banks.
Grossman reveals that many of the same components underlying the history of banking evolution are at work today. The recent subprime mortgage crisis had its origins, like many earlier banking crises, in a boom-bust economic cycle. Grossman finds that important historical elements are also at play in modern bailouts, merger movements, and regulatory reforms.
Unsettled Account is a fascinating and informative must-read for anyone who wants to understand how the modern commercial banking system came to be, where it is headed, and how its development will affect global economic growth.
Additional text
"Unsettled Account provides us with a new and welcome history of the last three centuries of banking. Who should read this book? A lot of people. For the legions of political, social and cultural historians, if they have to read one book on the historical evolution of banking, this is it. It will provide them with the needed theoretical background without an equation in sight, useful country studies, and the insights needed to instruct their students. For the legions of economic theorists, if they have to read one book on the historical evolution of banking, this is it. The book is a guide to every key stylized fact they might use for a model, identifying the broad parameters of institutions and history. For the legions of policy makers, if they have to read one book on the historical evolution of banking, this is it. Distanced from the crisis of the moment, Grossman nicely hits the key issues and distills some relevant lessons."---Eugene White, EH.Net
