Private Finance, Public Power

A History of Bank Supervision in America

Peter Conti-Brown, Sean H. Vanatta

• Publisher: Princeton University Press
• Year: 2025
• Print ISBN: 9780691233475, 9780691232829
• eBook ISBN: 9780691233468
• Topic: Economics
• Subtopic: Business Law
• Index: Economics

The strange and contested evolution of the management of banking risk

Banks in America are private institutions with private shareholders, boards of directors, profit motives, customers, and competitors. And yet the public plays a key role in deciding what risks are taken as well as how, when, and to what end. Public-private negotiations over financial governance has evolved into an essential ecosystem of banking risk management. In Private Finance, Public Power, Peter Conti-Brown and Sean Vanatta offer a new history of finance and public policy in the United States by examining the idiosyncratic way the nation manages financial risk across the public-private divide. Covering two centuries, from the founding of the Republic to the early 1980s, Conti-Brown and Vanatta describe the often-contested, sometimes chaotic, engagement of bankers, politicians, bureaucrats, and others in the overlapping spaces of the public-private system of bank supervision.

Conti-Brown and Vanatta trace the different supervisory frameworks that evolved over time, from the imposition of private liability on bank shareholders to the development of the central bank to the creation of federal deposit insurance. Negotiations took place at federal and state levels, but, over time, the federal government assumed most of the responsibility for managing financial risk. Moreover, federal supervisory officials began to undertake more varied tasks, including monitoring racial discrimination and managing financial concentration. Conti-Brown and Vanatta introduce a diverse cast of characters—bankers, politicians, bureaucrats, and others—and show how they navigated two hundred years of financial panics, scandals, and crises to build the system that structures modern America’s banking system.

Table of contents

• Cover
• Title Page
• Copyright
• Dedication
• Epigraph
• Contents
• Introduction
• 1. Origins: The Early Republic and the Free Banking Era
• Interlude: Supervision on Suspicion
• 2. The Rise and Retreat of Supervisory Discretion: Implementing the National Banking Acts in the 1860s
• Interlude: The Freedman’s Bank
• 3. Competition and Crisis in the Gilded Age
• Interlude: O. Henry and J.F.C. Nettlewick
• 4. Central Banking and Bank Supervision: Complements and Alternatives in the Founding of the Federal Reserve
• Interlude: Sioux Falls Falls
• 5. The 1933 Bank Holiday and the Legitimacy of Supervision
• Interlude: Banking on Bonds, for Better and Worse
• 6. Supervision’s New Deal: The Competitive Institutionalization of the 1930s
• Interlude: Supervising Japanese Banking
• 7. Supervising Concentration: Holding Companies and Merger Review in the Postwar Years
• Interlude: Training Examiners (and Bankers) in the 1950s
• 8. The Saxon Invasion: The Supervisory Battle over Risk and Failure in the 1960s
• Interlude: Bunco
• 9. The Expansion of Residual Risk: Bank Supervision for Antidiscrimination, Consumer Protection, and Community Reinvestment
• Conclusion: To What End, the Public Control of Private Finance
• Acknowledgments
• List of Abbreviations
• Notes
• Index