Warren-CoatesCayman Financial Review
October 31, 2014
Reviewed by Warren Coats

“The United States has had 14 banking crises over the past 180 years! Canada, which shares not only a 2,000-miles border with the United States but also a common culture and language, had only two brief and mild bank illiquidity crises during the same period.” And since 1839 Canada “has experienced no systemic banking crises.”

In this well-researched book, Charles Calomiris and Stephen Haber, economics professors at Columbia and Stanford Universities, respectively, explain what is responsible for the difference. In short, different countries have different banking systems as a result of the differences in the political bargains struck between political coalitions in different countries or in the same country at different times. It is the result of what the authors call the “game of bank bargains.”

» See full article in the Cayman Financial Review