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This chapter explores the political economy of banking in Texas at the turn of the last century. The empirical work sheds light on why Texans voted to allow the chartering of banks by the state government. The evidence shows that county-level voting patterns for state-chartered banks were significantly related to business interests, consumer interests, agricultural activity, and the presence of existing national banks. The work also shows that the first counties to receive the new state banks were associated with higher agricultural activity, larger population size, and the presence of existing national banks. By examining the vote and the location of early entrants in state banking, this chapter contributes to the literature exploring the historical development of state-chartered banking and the dual-banking system in the US.

Cryptocurrency arose, and grew in popularity, following the financial crisis of 2008 built upon a promise of decentralizing money and payments. An examination of the history of money and banking in the United States demonstrates that stable money benefits from strict controls and commitments by a centralized government through chartering restrictions and a broad safety net, rather than decentralization. In addition, financial crises happen when the government allows money creation to occur outside of official channels. The US central bank is then forced into a policy of supporting a range of money-like assets in order to maintain a grip on monetary policy and some semblance of financial stability.

In addition, this chapter argues that cryptocurrency as a form of shadow money shares many of the problematic attributes of both the privately issued bank notes that created instability during the “free banking” era and the “shadow banking” activities that contributed to the 2008 crisis. In this sense, rather than being a novel and disruptive idea, cryptocurrency replicates many of the systemically destabilizing aspects of privately issued money and money-like instruments.

This chapter proposes that, rather than allowing a new, digital “free banking” era to emerge, there are better alternatives. Specifically, it argues that the Federal Reserve (Fed) should use its tools to improve public payment systems, enact robust utility-like regulations for private digital currencies and limit the likelihood of bubbles using prudential measures.

The State of Delaware recently passed a new banking law that allows banks and bank affiliates chartered in Delaware to sell and underwrite insurance nationwide. The new laws provide two potential benefits to banks; (1) increased profits from selling insurance and (2) reduced interest rate risk exposure from underwriting insurance. We find support for increased profit potential to banks from the law, but we fail to find a reduction in the interest rate risk exposure of the banks.

The purpose of this paper is to summarize and provide commentary on the US Department of Treasury's Blueprint for a Modernized Financial Regulatory Structure, issued on March 31, 2008.

The paper summarizes and comments on the short‐, intermediate‐, and long‐term recommendations laid out in the Blueprint. The short‐term recommendations are to modernize the President's Working Group on Financial Markets, principally by broadening its focus to include the entire financial sector; to address gaps in mortgage origination oversight, principally though creating a federal Mortgage Origination Commission; and to enhance the Federal Reserve Board's current temporary liquidity provisioning process. The Treasury's intermediate‐term recommendations are intended to modernize the regulatory structure and to eliminate duplication. They are to phase out and transition the thrift charter to the national banking charter; to merge the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC); to establish a uniform, comprehensive regulatory system for, and create a federal charter for, “systemically important” payment and settlement systems; and to create an optional federal charter for insurers. The Blueprint's long‐term optimal regulatory structure envisions an “objectives‐based” regulatory approach in which three primary regulators would be established to focus individually on market stability regulation, prudential financial regulation and business conduct; three types of charters for financial institutions: federal insured depository institutions, federal insurance institutions, and federal financial services providers; the Federal Reserve Board assuming the role of market stability regulator; a prudential federal regulatory agency to regulate financial institutions with some type of explicit government guarantee associated with their business operations; and a conduct‐of‐business regulatory agency to regulate the business conduct of all financial institutions. In addition to the three objectives‐based regulators, the Blueprint recommends establishing two other regulatory entities: a federal insurance guarantee corporation and a corporate finance regulator.

The Blueprint finds that substantial regulatory reform is necessary to respond to significant developments including globalization of the capital markets, innovative and sophisticated new financial products and trading strategies, growing institutionalization of the capital markets, and convergence of financial service providers and financial products. Among the areas where one may see action and debate in the near future are: broadening the scope and membership of the President's Working Group on Capital Markets, adoption of uniform minimum licensing standards and the creation of a mortgage origination commission, further discussion of the terms and conditions attached to non‐depository institutions' access to the Federal Reserve discount window, continuing debate around the possible merger of the SEC and the CFTC, and updating by the SEC of the self‐regulatory organization (SRO) rule‐making process.

The paper is a clear and concise summary with commentary from expert securities lawyers.

Deregulation and other factors permit and encourage financial institutions to become more integrated, both within their own (financial) industries, such as banking and insurance, and across these industries. Financial regulators have responded with like integration. As financial institutions increasingly compete with firms from other industries and areas, financial regulators similarly compete more across borders. The resulting competition in financial regulation enhances innovation, choice, and efficiency. The advent of home-run regulation, which in general allows financial institutions to adhere only to the financial regulations of their home area and is spreading across the US and Europe, may allow numerous regulatory regimes within a given market.

The global financial crisis of 2008 raises many governance questions regarding the roles and responsibilities of executives and board members. Simultaneously, CEO duality in the USA and elsewhere has come under renewed scrutiny because of the perceived loss of checks and balances and resultant abuse of power. The authors suggest that the financial crisis presents a unique opportunity to explore the effects of, and attitudes, to CEO duality. The purpose of this paper therefore is to investigate whether CEO duality is associated with bank failure and whether bank regulators, as can be expected, are opposed to CEO duality.

The authors investigated the correlation between CEO duality and publicly traded banks in the USA that received Federal bailout funds, using available databases, and investigated bank regulators' attitudes to CEO duality using a series of structured interviews.

No correlation was found between bank failure and CEO duality. However, a strong correlation was found between bank ownership and receipt of Federal bailout funds in that publically owned banks were far more likely to have received bailout funds than banks which were privately owned. Surprisingly, it was also found that Regulators accepted CEO duality for several reasons and have no agenda to limit it.

The results suggest that CEO duality is a less significant issue factor in corporate management than suggested by many previous researchers and policy makers. This has clear implications for governance, regulation and legislation.

This study is the first to investigate the relationship between bank performance and CEO duality. The authors' results suggest that whilst there may be many good reasons for limiting CEO duality, the key measure of adverse effects on corporate performance in this sector is not one of them.

In total, 14 credit unions have acquired 16 banks and savings institutions since 2012; 7 additional acquisitions are in progress and are expected to close before year-end 2019. The analysis of the population of these acquisitions spans the paths of annual differences in CAMEL ratios. Most acquirers have a somewhat revised capital structure and are often benefiting from economies of scope, as well as economies of scale. Since their acquisitions, the acquiring credit unions have become less risky, measured by simulated CAMEL ratios, and they are lending a larger share of their deposits. There is no apparent financial reason to discourage credit unions from acquiring additional banks and savings institutions. The National Credit Union Administration does not need to be particularly hesitant to allow credit unions to acquire banks and thrifts.

Financial analysis is done via simulated CAMEL ratios.

After acquiring banks, credit unions are less risky and lend a greater share of their deposits.

The study analyzes the population of the credit unions that have acquired banks since 2012, but the population consists of 14 banks acquiring 16 credit unions.

Credit unions should not be prohibited from further acquisitions of banks and thrifts.

Credit union members are better served after a credit union acquires a bank.

No previous study has explored the effects of credit unions acquiring banks and thrifts, which began in 2012.

In this quarterly review of government publications, the judgments expressed are those of the reviewer, Dr. Frederic J. O'Hara, professor of library science, Graduate Library School, Long Island University, Greenvale, New York 11548. Unless otherwise indicated, all items are depository items and may be purchased from the Superintendent of Documents, Government Printing Office, Washington, D.C. 20402. Dr. O'Hara does not handle the distribution of any documents.

This paper presents issues arising from the enactment of legislation that changes the priority ordering of claims by uninsured depositors and the FDIC in the resolution of costly failed insured banks and thrifts. Under the legislation, uninsured domestic depositors and the FDIC receive preference in the payment of their claims in the resolutions of failed insured institutions over both foreign depositors and general creditors. As a result of the legislation, one can expect changes in the behavior of nonpreferred claimants.