hank.walker@UNH.CS.CMU.EDU (08/05/86)
I think it is much more likely that the financial stability since the Depression has been due to changes in the banking and investment industry, rather than the New Deal. In the 1920s you could buy stock on 10% margin. It is now 50%. Banks could also loan money on very low margin. The margins are much higher now. Banks were mostly individual institutions. Now they belong to the Federal Reserve system. There used to be no insurance. There is now federal, state, or private insurance for banks and savings and loans. Notice how there were recently runs on poorly insured banks in financial trouble, while federally insured banks that were also in trouble did not experience runs. -------