Bank failure is as American as apple pie. The first American failure took place in Rhode Island in 1809, when a bank capitalized at forty-five dollars issued eight hundred thousand dollars in bank notes, a sum equal to more than seventeen thousand times the resources behind it. In the 1990s the latest bank failure, alas, almost certainly took place less than a week before you began reading this article, as another savings and loan association was taken over by the government.

The 182 years between have been marked by literally tens of thousands of bank failures. In sharp contrast, Great Britain, whence most of American banking theory and practice comes, has not had a major bank failure in well over a hundred years.

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