Economics 201:  Banking

Link to slides

Just essential!  

• "It's a Wonderful Life" movie bank run (1946).  Here is the script.

• What is Bank Capital?  "Ask a Banker:  Capital, Capital!"  (NPR, May 20, 2013)

For interest:

• • “Though the principles of the banking trade may appear somewhat abstruse, the practice is capable of being reduced to strict rules. To depart upon any occasion from those rules, in consequence of some flattering speculation of extraordinary gain, is almost always extremely dangerous and frequently fatal to the banking company which attempts it.”

    • -Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, PART III. Of the Expense of public Works and public Institutions, ARTICLE I.—Of the public Works and Institutions for facilitating the Commerce of the Society.

• How did we get into the 2008 Financial Crisis?  Warning: The graphics are crudely drawn, and some of the language is just plain crude.

  • And now it's a charming video

• Magnetar Capital, an Evanston based hedge fund, did a lot to keep the the housing bubble going...and so did a lot to crash the world's economy.  Yet more on Magnetar's dealings.

• A nice diagram of this process (New York Times)

• “The distinctive function of the banker,” — says Ricardo, “begins as soon as he uses the money of others”; as long as he uses his own money he is only a capitalist."  — Walter Bagehot (1924)

• Some pictures of classic historical financial scandals (New York Times, July 18, 2010)

• My favorite song about banking