Local banking panics of the 1920s: Identification and determinants

Using a newly discovered dataset of U.S. bank suspensions from 1921 to 1929, we discovered that banking panics were more common in the 1920s than had been believed. Besides identifying panics, we investigate their determinants, finding that local banking panics were more likely when fundamental economic conditions were generally weak and more likely in “overbanked” states; they were less likely in states with deposit insurance or states where a relatively large share of banks belonged to chain banking organizations. •We use a new dataset to study bank suspensions in the U.S. during the 1920s.•We complement this dataset to include the geographical coordinates of each suspension.•Using newspaper articles and reopening rates, we identify 14 local banking panics.•We investigate a variety of economic conditions that explain the incidence of these panics.