Commercial Bank Liquidity Behavior During the 1954—1958 Business Cylce
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Date
1962-08
Authors
Young, Theodore James
Journal Title
Journal ISSN
Volume Title
Publisher
University of Oregon
Abstract
Due to the rather unique character of commercial banking as a business, with the very large proportion of liabilities payable on demand, the necessity of maintaining an adequate level of liquidity assumes more importance in banking than in other types of businesses. The obligation which a bank must be prepared to meet above all else in that of depositors’ claims for withdrawal of their funds whenever they choose. A bank may temporarily refuse worthwhile requests for credit, or fail occasionally to earn a normal returns for its stockholders and still remain in business with the expectation that the situation will improve. But once it finds itself unable to raise the funds with which to meet its depositors’ claims for payment, it is liable to face extinction as a business enterprise.
Description
95 pages
Keywords
banking system, business cycle, monetary policy