Don Morgan and James Narron — Crisis Chronicles: The Panic of 1825 and the Most Fantastic Financial Swindle of All Time

Modern Parallels? 

It seems that the Bank [of England] eventually threw everything it had at the Panic of 1825. Does that sound familiar? The Term Auction Facility, the Commercial Paper Funding Facility, the Money Market Investor Funding Facility, and the Term Asset-Backed Securities Loan Facility are just a few of the liquidity programs that the Federal Reserve used to stem the Panic of 2008.

This 2009 blog post draws some parallels between 1825 and 2008 based on the information asymmetries that plagued the securities markets in both cases—bonds issued by far-off, fledging nations in the former case and exotic asset-backed securities in the latter. Are there other parallels between the panics of 1825 and 2008? Let us know what you think.

FRBNY — Liberty Street Economics
Crisis Chronicles: The Panic of 1825 and the Most Fantastic Financial Swindle of All Time
Don Morgan, assistant vice president in the Federal Reserve Bank of New York’s Research and Statistics Group, and James Narron, senior vice president in the Federal Reserve Bank of San Francisco’s Cash Product Office