A bank note, unlike a deposit account, is a financial asset traded in a secondary market and priced by expert market makers, so any doubt about a bank's solvency causes its notes to trade at a discount immediately—giving note holders faster warning signals than a car buyer gets about product quality.

causalpending

Speaker

George Selgin

Evidence Quote

its notes are going to go to a discount and you will know that because you won't be able to trade them currently you won't be able to deposit them at any other Bank

Source

George Selgin on Free Banking 11/17/2008EconTalk
Created: 6/15/2026, 9:20:23 AM

My Notes

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