Insider Lending
Banks, Personal Connections, and Economic Development in Industrial New England

This book, first published in 1994, explores the important role that insider lending played in the economic development of early nineteenth-century New England.

Naomi R. Lamoreaux (Author)

9780521566247, Cambridge University Press

Paperback, published 28 August 1996

194 pages, 14 b/w illus.
22.9 x 15.2 x 1.1 cm, 0.29 kg

'This is an important book which explores the evolution of bank lending strategies during the industrialisation of New England.' Mary B. Rose, Business History

The term insider lending conveys an aura of abuse and corruption, of unethical, if not illegal, behaviour. In early nineteenth-century New England, however, insider lending was an integral aspect of the banking system. Not only was the practice an accepted fact of economic life, but, as Naomi R. Lamoreaux argues, it enabled banks (at least in this particular historical context) to play an important role in financing economic development. As the banking system evolved over the course of the century, however, lending practices became more impersonal and professional. Ironically, the information problems banks faced when they began to conduct more and more of their business at arm's length forced them to concentrate on providing short-term loans to commercial borrowers and to give up financing economic development. This book was first published in 1994.

Acknowledgements
Introduction
1. Vehicles for accumulating capital
2. Insider lending and Jacksonian hostility towards banks
3. Engines of economic development
4. The decline of insider lending and the problem of determining creditworthiness
5. Professionalization and specialization
6. The merger movement in banking
Conclusion.

Subject Areas: Economic history [KCZ]