Private Finance, Public Power

Peter Conti-Brown is the Class of 1965 Associate Professor of Financial Regulation at The Wharton School of the University of Pennsylvania and a nonresident fellow in economic studies at the Brookings Institution. He is the author of The Power and Independence of the Federal Reserve and the coauthor of The Law of Financial Institutions. Sean H. Vanatta is senior lecturer in financial history and policy at the University of Glasgow. He is the author of Plastic Capitalism: Banks, Credit Cards, and the End of Financial Control.

“Conti-Brown and Vanatta have written a brilliant history of the murky realm of banking supervision. Recovering over two centuries of intense conflict and negotiations over risk within America’s banking system, the authors explain how the federal government readily absorbed the vital responsibility of managing financial risk. This sweeping history is a must-read for anyone interested in understanding the origins of our modern financial system.”—Julian Zelizer, Princeton University

“Conti-Brown and Vanatta masterfully illuminate the historical evolution of bank supervision from a regular assessment of an individual bank’s financial condition into the sweeping system of institutionalized discretion over every aspect of the banking system we have today. This pathbreaking and careful historical account will be critical in the coming debate on bank supervision between those who want to defend the role of government discretion in moderating private risk taking and those who want to ensure that government action is always grounded in transparency and due process.”—Randal Quarles, Former Vice Chair of the Federal Reserve

“In a book that manages to be both weighty and entertaining, Peter Conti-Brown and Sean Vanatta establish the pivotal role of discretionary supervision in the history of American banking regulation. In showing the persistence of key policy debates through major changes in the scope of supervision, they illuminate the important issue of defining public and private responsibilities for banking practices and stability that is still with us today.”—Daniel K. Tarullo, Harvard Law School

“Supervision is the backbone of bank oversight in the United States and around the world. In their landmark book, Private Finance, Public Power, Conti-Brown and Vanatta pull away the curtain of opacity that has long shielded bank supervision from public view. They reveal supervision to be a constantly evolving set of relationships and practices that shape private risk-taking and public administration. In the process, they provide important new insights into a host of contemporary debates on matters ranging from how best to promote the health of the financial system to the dangers and benefits of regulatory discretion. It is required reading for everyone who wants to understand how best to promote financial stability, state capacity and the way public and private actors have cocreated today’s financial system.”—Kathryn Judge, Columbia Law School