Banking Portfolios and Banking Distress During the Great Depression in the U.S.

Inhaltsverzeichnis (Table of Contents)

• Introduction
• Literature Review
• The American Banking System and Its Importance
• The Financial Crisis
• Value at Risk
• Empirical Part
• Dataset
• Study
• Conclusion
• Reference List
• Appendix

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This thesis aims to analyze the impact of banking portfolios and distress on the U.S. economy during the Great Depression. It explores the role of the American banking system, the financial crisis, and the concept of Value at Risk (VaR) in understanding the economic downturn.

• The structure and importance of the American banking system in the 1920s
• The causes and consequences of the financial crisis leading to the Great Depression
• The application of Value at Risk (VaR) in assessing banking portfolio risk during the crisis
• The impact of banking distress on the U.S. economy and its recovery
• The lessons learned from the Great Depression for modern financial systems

Zusammenfassung der Kapitel (Chapter Summaries)

• Introduction: This chapter provides an overview of the Great Depression, highlighting its historical context and significance. It discusses the rapid economic growth preceding the crisis and the factors that contributed to the downturn.
• Literature Review: This section explores relevant literature on the American banking system, the financial crisis of the 1920s, and the concept of Value at Risk (VaR). It examines key theories and research findings that inform the thesis.
• The American Banking System and Its Importance: This chapter delves into the structure and operation of the American banking system in the 1920s, emphasizing its importance to the economy.
• The Financial Crisis: This section examines the causes and consequences of the financial crisis that led to the Great Depression, analyzing the role of various factors such as speculation, overconfidence, and the Federal Reserve's policies.
• Value at Risk: This chapter introduces the concept of Value at Risk (VaR) and its application in assessing banking portfolio risk. It explains the methodology and its relevance to the study.
• Empirical Part: This section presents the empirical analysis conducted for the thesis, including the dataset used, the study methodology, and the findings.
• Dataset: This chapter describes the data sources and variables used in the empirical analysis, providing details on the data collection and preparation process.
• Study: This section presents the study methodology, explaining the research design, statistical techniques employed, and the analysis conducted.

Frequently Asked Questions

What role did the U.S. banking system play in the Great Depression?

The structure of the banking system, characterized by high failure rates, is considered a major factor in explaining the severity and length of the financial crisis.

What is Value at Risk (VaR) in the context of this study?

VaR is a statistical measurement used to assess the level of financial risk within a banking portfolio over a specific time frame.

Could the high failure rates of the 1930s have been forecasted?

The study investigates whether analyzing bank balance sheets and asset investments before the crisis could have predicted the subsequent insolvencies.

What is the difference between illiquidity and insolvency?

The paper examines whether banks during the Great Depression failed because they lacked immediate cash (illiquid) or because their total liabilities exceeded their assets (insolvent).

How did bank investments influence failure rates?

Using a regression model, the study tests if the specific types of assets banks invested in had a proportional connection to their likelihood of failing.