New Government Report: Preventing a Repeat of the Money Market Meltdown of the Early 1930s (ISBN: 9781437935592)
Preventing a Repeat of the Money Market Meltdown of the Early 1930s (ISBN: 9781437935592)
By John V. Duca
(Paperback, 49 pages, 2010, $20.00)
The current worldwide recession is the worst financial crisis since the Great Depression of the 1930s. Analyzes the meltdown of the commercial paper market during the Great Depression, and relates those findings to the recent financial crisis. Theoretical models of financial frictions and information problems imply that lenders will make fewer non-collateralized loans or investments and relatively more extensions of collateralized finance in times of high risk premiums. This study investigates the relevance of such theories to the Great Depression by analyzing whether the increased use of a collateralized form of business lending relative to that of non-collateralized commercial paper can be econometrically attributable to measures of corporate credit/financial risk premiums. Charts and tables.
Entry filed under: New Government Reports. Tags: 1930s, collateralized finance, commercial paper, corporate credit, finance, financial crisis, financial frictions, financial risk, government, great depression, great recession, high risk premiums, investments, lenders, lending, meltdown, money market, non-collateralized loans, report.