Should government bank deposit insurance be scrapped in favor of a system of bank cross-guarantees? Some proponents claim to have found successful cross-guarantees among the banks of antebellum Indiana, Ohio, and Iowa, but a closer examination suggests otherwise.

James E. Hartley is an associate professor of economics at Mount Holyoke College, South Hadley, Mass.
Banking and FinanceBanking Law and RegulationEconomyLaw and Liberty