The history of central banking (and large scale monetary policy generally), is fascinating.
This lecture I found particularly enlightening (George Selgin): https://www.youtube.com/watch?v=JeIljifA8Ls
Noteworthy remarks:
Even before central banking, government regulation required banks purchase junk assets (causing failures)
Nonuniform currency price slippage (when each bank issued its own notes) may have been < 1%
The National Bank Act taxed private bank notes at 10%, effectively destroying private currency circulation
National Bank notes were backed by US debt. As the debt shrank, currency became scarce, leading to crisis.
Canadian banking at the time (not centralized until 1935) was both deregulated and did not suffer currency crises (see 17:54 for graph)
Now, it turns out that the Fed was designed not by politicians, or bureaucracy, but instead by special interest groups (namely Wall St.).
See The Meeting at Jekyll Island
The history of central banking (and large scale monetary policy generally), is fascinating. This lecture I found particularly enlightening (George Selgin): https://www.youtube.com/watch?v=JeIljifA8Ls
Noteworthy remarks:
Even before central banking, government regulation required banks purchase junk assets (causing failures)
Nonuniform currency price slippage (when each bank issued its own notes) may have been < 1%
The National Bank Act taxed private bank notes at 10%, effectively destroying private currency circulation
National Bank notes were backed by US debt. As the debt shrank, currency became scarce, leading to crisis.
Canadian banking at the time (not centralized until 1935) was both deregulated and did not suffer currency crises (see 17:54 for graph)
Now, it turns out that the Fed was designed not by politicians, or bureaucracy, but instead by special interest groups (namely Wall St.). See The Meeting at Jekyll Island