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The Future of Money in the Information Age

Chapter 18: The Future of Currency Competition

Catherine England

Economists generally accept that competition in supplying virtually any good or service will lead to superior results in terms of improved quality, efficient production, and lower prices. When the good being supplied is a money, however, agreement about the benefits of competition is not universal. Even among economists, debates rage about whether economic systems in which currencies compete would lead to superior performance or to overissue and runaway inflation.[1Although "currency" narrowly defined is the paper money we carry, we also use "currency" more broadly defined to refer to different types of money. Dollars, yen, francs, pounds, and Deutschemarks are thus different currencies. The focus of this paper might be more clearly described as competing monies.]

I will argue that competition among suppliers of different monies is beneficial. To support that conclusion, I will review the case for competing currencies. I will discuss how increased competition among government-provided monies is already leading to lower inflation rates in developed economies. Finally, I will describe how privately supplied monies might enter the picture. I begin, however, with definitions and a brief discussion of the current role of central banks in supplying money to an economy.

What Is Money?

Articles about electronic money and "e-cash" abound. But as yet there seems to be no broad agreement about what electronic money is. Discussions of the subject include (and at times confuse) everything from whether or not credit card numbers can be securely transmitted over the Internet to the prospects for home banking to expanded opportunities for international transfers of financial assets. These questions (and many other similar issues) are all interesting, but this paper is concerned with who supplies the money used in an economy and whether the electronic revolution will change the supplier's identity.

But what is "money"? Money is what money does. We are particularly interested in money as a "medium of exchange."[2Money is typically viewed as having three characteristic functions. In addition to being a medium of exchange, money also represents a store of value and provides a unit of account. We will discuss the second and third functions below.] In other words, "money" is anything I will accept in payment for goods or services because I can use the same money to buy what I want.

A single money (U.S. dollars, for example) may take different forms. Ask someone how much money she has, and she may count only the money in her wallet, she may think in terms of her checking account, or she may include balances in her savings account or investments in her stock mutual fund in arriving at a total.[3In fact, government authorities use several definitions of money. The most narrow definition of money (M1) includes coins and currency in the hands of the public and checkable accounts. M2 includes M1 plus overnight repurchase agreements, overnight Eurodollar deposits, individuals' balances in money market mutual funds, balances in money market deposit accounts, savings deposits, and small (under $100,000) time deposits. M3 includes M2 and other less liquid balances.] Because of our emphasis on media of exchange, we will consider only readily spendable forms of money. In the United States (and other developed economies) money appears as both coins and currency (cash) and as checkable account balances, usually kept at banks and other depository institutions.

The central bank (the Federal Reserve System in the United States) is typically responsible for supplying the country's money. In economies where cash is the dominant form of money, the central bank has direct control over the domestic government-provided money supply, because the central bank determines how much money it will print.[4Cash is more important where the banking or payment processing systems of a country are less fully developed or (sometimes) where taxes or regulations are especially burdensome.] In more developed economies, bank money (i.e., balances in checkable accounts) plays a more important role. As financial systems become more sophisticated and checkable account balances grow in importance, the central bank loses some of its control over the supply of the domestic money supply. Banks affect the money supply when they decide how much to lend.[5This is the case in countries with fractional reserve banking systems (which includes most countries). When a bank makes a loan, it increases the money available in the borrower's bank account without decreasing anyone else's bank account. Thus, the total amount of spendable money available in the economy increases.] As banks lend more, the money supply expands. When banks reduce their outstanding loans, the money supply contracts. The Federal Reserve can increase or decrease banks' capacity for making new loans, but the Fed cannot control banks' willingness to lend. As a result, the Federal Reserve does not exercise absolute control over the total number of dollars in the economy.[6The Fed has three primary monetary policy tools: reserve requirements, the discount rate, and open market operations. Of these, open market operations are the most important. When the Fed buys Treasury securities on the open market, it provides more reserves to the banking system and encourages increased lending and money supply growth. Conversely, when the Fed sells its Treasury securities on the open market, it reduces the reserves available to the banking system, making it more difficult for banks to lend.]

Nor does any central bank exercise an absolute monopoly over the types of money in the domestic economy. Although government-supplied monies are most commonly used, if inflation becomes a serious problem, individuals in the economy may substitute other monies.[7Substitute monies have also arisen when there were insufficient supplies of government-sanctioned currency provided.] In some cases, buyers and sellers make exchanges using a currency from another country. The U.S. dollar and the German Deutschemark are both widely used outside their respective countries to buy and sell goods and services. But market participants need not turn just to other government-supplied currencies in the face of an unstable domestic money. After the collapse of the communist regime, prices in some Eastern European countries were quoted in quantities of rum, which could be used to buy a wide variety of other goods. As a practical matter, however, as long as the official government-sanctioned money represents a reasonable store of value (i.e., inflation is not too high), it enjoys an advantage over competing currencies in domestic transactions. After all, taxes are paid in government-sanctioned money.

Why Competing Currencies?

Supporters of government money monopolies express two general concerns about competing money regimes. They worry about inflation and about transactions costs. In economic models, competition among suppliers causes the quantity produced of a good to increase and the price of the good to fall to its cost of production (including a normal profit). But an excessive increase in the supply of money will cause inflation. Opponents of competitive private currencies express concern that competition would mean an expanding total money supply (and consequent inflation) until the value of each money unit fell to its cost of production. As advances in technology reduce the cost of producing money, opponents of competition argue, the money supply would expand ever faster, causing increasing price instability.

Proponents of government-supplied money also argue that a single money, like a single language, facilitates trade and reduces transactions costs. (Europeans who favor a single Europewide currency make this argument.) In an economy where the government provides a single recognizable currency, merchants need not worry about determining the value of funds tendered in payment for goods. Similarly, buyers know their money will be accepted by merchants. As evidence of the money's "natural monopoly" status, advocates of government-provided monies often point to the fact that all major economies have central banks and government-supplied currencies.

The arguments in favor of competing currencies are the arguments in favor of competition generally. F.A. Hayek (1976, 1978), Roland Vaubel (1986), Lawrence H. White (1984, 1989), and George Selgin (1988), among others, have argued that competing suppliers of currencies would be required to provide market participants with monies exhibiting the characteristics that are most widely desired. Users of monies are generally assumed to prefer monies that are widely accepted and provide a stable (or at least predictable) store of value.

Government currencies have generally achieved reasonably wide acceptance, at least domestically.[8There are of course exceptions, but having the power to declare a currency "legal tender" helps promote acceptance.] But a stable value has proved more elusive. Marjorie Deane and Robert Pringle (1994: 352-53) reported that from 1971 to 1991, the German Deutschemark lost more than 52 percent of its value, and Germany had the best record. By 1991, the U.S. dollar had lost more than 70 percent of its 1971 value, and over the same 20-year period, the British pound lost more than 84 percent of its 1971 value.

In fact, proponents of competition see reduced inflation as one of the primary benefits of currency competition. Vaubel (1986: 928) explained that the argument that competition would lead to overissue and inflation "confuses the price of acquiring money (the inverse of the price level) with the price (opportunity cost) of holding money. . . . Since money is an asset to be held, demand for it depends on the price of holding it." The cost of holding money rises as it loses purchasing power through inflation. Given a choice, market participants presumably would prefer to make exchanges and settle contracts (especially contracts with payments in the future) with a more reliable store of value.

Conventional wisdom holds, of course, that, when they existed, privately provided currencies were not "good" monies. "Wildcat banking" is the term most frequently associated with private banks' issuing competing bank notes in the United States. Banks were said to locate where only the wildcats could find them, thereby slowing the rate at which their bank notes could be returned and exchanged for gold or silver coins.

Merchants recognized that it might be difficult to obtain payment in good funds from unknown banks, of course, and they accepted notes from those banks only at a discount. Discounts depended on the reputation of the bank and the ease with which the notes could be exchanged for gold. Money brokers arose to buy bank notes from merchants and travelers and return the notes to their issuing banks for payment in gold. The brokers published lists of banks and the discounts (if any) attached to their notes.

Individuals and businesses accepting payment in notes from an unknown bank did need to invest in information about the market value of the notes, and market participants sometimes received less purchasing power or a poorer store of value than they had expected when they accepted particular notes in payment for some good or service.[9Of course, the same has been true of government-issued monies.] But scholars taking a closer look at privately supplied currencies have not found the chaotic monetary conditions long assumed to have existed.[10See, for example, Rockoff (1975), Rolnick and Weber (1986), and Dowd (1992).] Arthur Rolnick and Warren Weber (1986: 887-88) observed, for example, that relevant information about the health and business practices of banks was more widely available during the 19th century than it is today. As a result, bank runs were not the random events they have often been pictured. They were targeted to institutions with serious solvency problems.[11See also Kaufman (1988).] Lynne Doti and Larry Schweikart (1987) found in their study of banking in Western states that newly arrived bankers generally had to live in a community for several years and establish a reputation for honesty in some other line of business before they could attract deposits. Substantial bank buildings with expensive safes were not only a means of discouraging external thieves. They also provided a form of tangible, illiquid, immovable capital investment that a dishonest banker would of necessity forfeit if he left town.

Difficulties that did arise with privately issued currencies were often the result of government restrictions on private arrangements. Widespread government-imposed branching restrictions made it possible for less soundly managed banks to survive because stronger banks were unable to expand by opening new offices. Still, as long as banks were allowed to issue distinctive notes, overissue was limited both because distinctive notes could be readily returned to the issuing bank and because there was a real benefit to a bank's building "name brand capital" as a supplier of "quality" bank notes that traded at par.[12Interestingly, banks that established a reputation for promptly paying gold for notes returned to them often found that their notes began to circulate longer (were returned less quickly) as they became more widely accepted as a reliable store of value.] Governments' subsequent requirements that banks issue uniform currencies increased banks' ability to overissue notes because the overissuing banks could not be as readily identified and their notes returned to them. Similarly, government efforts to force all bank notes and checks to trade at par reduced the market's discipline of less financially stable banks.[13Gresham's (oft-quoted, but typically misunderstood) Law, "Bad money drives out good," applies only in markets with government enforced fixed exchange rates where the "bad" money is overvalued relative to the good. Requirements that all bank notes circulate at face value (which fixed the exchange rate) meant that notes issued by less sound banks (the "bad" money) was overvalued relative to money issued by sound banks (i.e., "good" money).]

In short, private, competitive note issues did provide a stable source of money in many different economic settings.[14Dowd (1992), for example, examines private note issue in Australia, Canada, Colombia, Foochow (China), France, Ireland, Scotland, Switzerland, and the United States.] Government-sponsored monies came to prevail, however, as governments sought to obtain for themselves the profits and advantages accruing to a monopoly supplier of money.

For a long time, governments were able to secure their money monopolies by fixing exchange rates, restricting international capital flows, limiting citizens' holdings of foreign currencies, and discouraging domestic market participants from writing contracts payable in an outside currency. Rapid advances in computer and communications technologies have reduced governments' ability to control international flows of funds, and increasingly government-sanctioned currencies are competing in international capital markets.

Competition Among Governments

In their book, The Central Banks, Deane and Pringle (1994) identified the removal of exchange rate controls as the point at which government-issued currencies began to compete with one another. As Deane and Pringle (ibid.: 325) observed, "[National currencies] were still issued by central banks with a monopoly of issuing high-powered money--bank reserves--denominated in the national currency, but there was less and less compulsion on anybody actually to use a given currency." Expanding world trade and rapidly developing international capital markets are also contributing to increasing capital mobility.

In a survey article on "The World Economy," the October 7, 1995 Economist described how changes during the past 20 years have altered international capital markets. As communications technology has advanced, the Economist argued, the world's financial markets have begun to evolve from a collection of individual domestic markets to a single massive global capital market. In this global capital market, investors shop any number of countries for desirable additions to their securities portfolios. The value of a security is clearly influenced by the stability of the currency in which the security is denominated.

This increasing competition for financial capital is placing growing constraints on policymakers. Richard O'Brien (1995) observed that governments that attempt to tax too heavily (either explicitly or implicitly) see businesses shift their production to other countries. Governments that attempt to borrow too much or that allow their currencies to be devalued through inflation see investors flee with their funds looking for safer financial havens. The growing amount of financial capital that responds decisively to unsound government policy initiatives has forced government decisionmakers to consider the reactions of financial markets before introducing major new policy initiatives. The Economist survey quoted James Carville, an advisor to President Clinton: "I used to think that if there was reincarnation, I wanted to come back as the president or the pope. But now I want to be the bond market: you can intimidate everybody."

The transition to a single capital market is not complete, but it is far enough advanced that government decisionmakers are bemoaning their loss of control over their domestic economies. As Deane and Pringle (1994: 326) remarked, "Central banks are beginning to behave more like privately owned firms without actually being privatized."

Financial capital can only become more mobile as the information age advances. Practical barriers to individuals and businesses maintaining accounts with institutions in other countries will continue to fall. Why would I not store my wealth in a currency that retains (or increases) its value if moving funds to another location or another money requires only a few instructions delivered through my computer any time day or night? David Bollier (1996: 29) reported that First Direct, a bank based in Leeds, England, has attracted 500,000 on-line customers over the past five years. In the United States, Security First Network Bank of Pineville, Kentucky, has no physical branches. Its customers mail in deposits and access their accounts over the Internet. Other banks are exploring on-line banking services as is American Express, a nonbanking company. It is easy to imagine a worldwide bank offering accounts and loans in a variety of currencies. It is already beginning to happen. The physical offices of such a bank could exist almost anywhere--or nowhere if employees of the bank telecommute from locations in different countries around the world.

Enter Private Monies?

There are those who argue that bankers already supply private money. The vast majority of the money supplies of developed countries is found in the account balances of banks. But banks are regulated by the government, and they are subject to central bank reserve requirements. In thinking about private monies that compete with Federal Reserve-issued dollars, there are two paths to explore. The first path considers nonbank institutions, not subject to oversight by the central bank, creating additional spendable funds in much the same way banks do today. The funds created would still be "dollars" just as spendable funds generated by banks' lending activities are dollars. The second path to private money creation would involve a more direct challenge to the monetary authority, because a private supplier of this alternative would promote use of its money by pointing to its superiority as a more stable store of value, a more widely accepted medium of exchange, or an improved unit of account.

New Sources of Dollar Creation

Suppose a nonbank company that currently issues credit cards offers to parents of college students a prepaid debit card that can be "charged" at the beginning of the semester with funds to pay for everything from telephone calls to gasoline, groceries, rent, tuition, and books. If the card's sponsor (call the company National Express) takes the funds it receives from parents and invests those funds in loans to businesses, National Express has effectively created money. To the college students and their parents, the balances remaining on their debit cards are "money." But the businesses receiving the loans also have "money" they can spend. More spendable funds are available after National Express makes the loan than before the loan is made. National Express would no doubt look at its business loans as just a way to invest idle funds. It might not intend to challenge the monetary authority or serve as a source of "money creation." But create money, it has.

Some observers argue that any organization creating spendable balances in this manner should be subject to Federal Reserve oversight, especially Federal Reserve reserve requirements. The two most commonly cited reasons for subjecting these institutions to federal supervision are (1) to maintain the Fed's control over the money supply, and (2) to enable the Fed to act decisively if a nonbank, money creating institution should fail.

If nonbank institutions do begin to create money, the Fed's direct control of the money supply would appear to be diminished. But as noted, the Fed's control over the money supply today is not complete. Money creation depends on households' willingness to leave their funds in banks and banks' willingness to lend. With or without nonbank institutions creating money, the Fed will be forced to monitor economic conditions and overall credit creation and focus its efforts on affecting total liquidity through open market operations. There is not a strong argument for the Fed's regulating nonbank institutions as a means of consolidating its control of the U.S. money supply.

The Fed's feeling a need to intervene if a nonbank institution should fail would indicate either explicit or implicit access by the failed institution's creditors to the deposit insurance safety net. But the creditors of National Express (the college students' parents who had deposited funds against which the debit card would draw) should not receive federal guarantees. First, taxpayers' insurance obligations should not be extended further. Second, forcing new nonbank institutions to develop without deposit insurance (or other similar guarantees) would ensure that these institutions represented a real alternative to commercial banks.

I have argued that the introduction of federal deposit insurance in 1934 stunted the development of more stable forms of banking by shifting to the government the risk of bank runs and failures. The advantages of a more stable banking system to both depositors and bank owners and managers are substantial in the absence of government guarantees. Without deposit insurance, new contractual arrangements or different security mechanisms would surely have developed as market participants searched for stability. The

dramatic failures of the 1980s as well as central bankers' continuing concern about the fragility of the financial system would seem to indicate government guarantees have not solved the stability problem.

With the advent of new sources of money creation, we have an opportunity to see where market developments will take us. Nonbank money-creating institutions could well be subject to runs, just as banks are.[15This is because money-creating financial institutions typically do not have enough readily liquidated assets to meet all their outstanding liabilities should all their creditors demand immediate payment.] If nonbank institutions want to create money, they should be left on their own to establish contractual terms and security arrangements necessary to reassure customers.[16England (1988) describes many of the arrangements used by uninsured bankers historically to reassure customers.] Institutions that want federal guarantees could apply for bank charters. But if the Fed simply extends either explicit or implicit guarantees to the creditors of nonbank institutions, bank-like regulation would almost certainly follow. Regulating nonbank financial institutions like banks would reduce the innovation and experimentation taking place in U.S. financial markets, and we might miss an opportunity to discover a superior banking arrangement.

New Types of Money

New types of money are unlikely to arise in the absence of substantial dissatisfaction with existing government-sponsored monies. So the creator of a new money might arise in the face of substantial inflation. Of course the money entrepreneur would need to find a way to provide a credible promise that his privately issued money would maintain its value where the government money had not. Some commentators have envisioned the development of separate "cyberspace" monies as a means of avoiding taxes. If a bank or other financial institution has no physical offices, how could government regulators or tax collectors enforce a demand to review the institution's books? The task becomes more complex if account balances are reported and payments made and received in some new cyberspace credit. Then again, new types of money might represent nothing more than a convenience. Our worldwide bank offering accounts in different currencies could conceivably create a completely new unit of account in which to keep its records. Deposits and withdrawals in government currencies would be translated into Planet Bank monetary unit equivalents. From there it is a short step to contracts written and fulfilled in Planet Bank units rather than in yen, francs, or dollars.[17Speculation about a Planet Bank monetary unit may remind readers of efforts by countries in the European Union to create a European-wide currency. The difference is that a private international monetary unit would have to gain acceptance among money users by displaying valued characteristics. It would not be imposed by government authorities.] While advances in communications technology may dramatically change the terms under which market transactions take place, I believe historical episodes of private monies can provide some insights into what a 21st century private money would look like.

Any money depends first on trust. Private (and public) issuers of money in the future will be required to establish their reliability in delivering payment services through mechanisms that meet the needs of users. Marvin Sirbu, a professor with the Information Network Institute at Carnegie Mellon University, has observed: "All money depends upon trust in my ability to issue an instruction to move money from one place to another" (Bollier 1996: 26). Moving money essentially involves an instruction to the "keepers of the books." Buyers and sellers must believe that "money" exists in the repository that receives the payment instruction, that the instruction to make a payment will be faithfully executed, and that the identity of the payor and the payee can be authenticated.

But how do we know that the "keepers of the books," whether they are regulated commercial banks or institutions that exist in cyberspace, have money with which to make payments? Historically, money was first something that had value in itself (tobacco, animal hides). Then currencies convertible to something of value (usually gold) were developed. Today's fiat currencies are backed only by governments' promises to control their supply, but at least we can hold fiat currencies in our hands. What happens as electronic forms of money become increasingly important? Regulated commercial banks keep their money balances as cash in the vault or (primarily) as accounts with the Federal Reserve System. Thus, the central bank vouches for their having "money balances."

Users of privately created cyberspace monetary units would also no doubt insist on some independent verification that the "money" did in fact exist. Trusted, third-party guarantors might thus develop to verify the presence of reserves or assets necessary to make payments. Cyberspace credits would almost certainly be payable (at the depositor's discretion) in something other than just more cyberspace credits. For our Planet Bank described above, the newly created monetary unit might be payable in the depositor's choice of any of a number of government-issued currencies. Another contract might develop whereby a cyberspace customer could receive payment in any of a list of financial assets--U.S. Treasury securities, Aaa corporate bonds, or gold futures, for example. The formulas for converting cyberspace monetary units to either government currencies or to other financial assets would be established up front.[18Treasury bond futures contracts are based on an artificial bond with a standardized (and constant) coupon rate and maturity. When Treasury bond futures contracts come due, those owners of futures contracts who do not cash settle can choose from one of several actual bonds to meet the delivery requirements of the contract. Conversion formulas for different types of bonds are established and agreed to by all market participants up front.]

Historically, successful issuers of money often had to do more than just make a promise to convert their bank notes into gold. They often needed a physical presence in the town, someplace customers could go to receive payment. Furthermore, successful "new" bankers often had already established reputations in a nonbank line of business so that customers felt they knew with whom they were dealing. Will market participants require similar reassuring structures before accepting new monies in the coming century? It is widely expected that home banking using personal computers will allow banks to close large numbers of physical branches as we move into the 21st century. Will customers continue to demand to be able to meet with bank representatives face to face when there is a problem or a question? And if trust is a prerequisite to introducing new monetary services, what companies will become the new money entrepreneurs? Will totally new entrants find ways to reassure market participants about their trustworthiness? Or will we only use new monies and payment systems offered by corporations and institutions with recognized, established reputations?

There are also many questions about the terms in which new monies might be denominated. To truly compete with government-issued money, users would have to be able to distinguish privately issued currencies from dollars, pounds, and lira. That would make it more difficult to denominate new monies in terms of the government-sanctioned monies, but it would not necessarily be impossible. During the 19th century, privately issued bank notes in the United States were all denominated in dollars, for example. Notes issued by less sound banks simply circulated at a discount. Perhaps dollar-denominated private money issued by (say) American Express would circulate at a premium if it came to represent a superior store of value to U.S. government dollars.

Finally, F. X. Browne and David Cronin (1995), among others, foresee mutual funds becoming the basis for privately issued monies. Mutual fund-based money would eliminate any reason for runs to develop, and proponents argue it thus provides a superior basis for supplying transactions balances.[19Because mutual fund shares are constantly marked to market, there is no advantage to being first in line to receive your funds.] This could be one of the new, superior forms of bank contracts that develop, but my guess is that many individuals and businesses will want their transactions account to maintain a fixed (or growing, but not fluctuating) value.

Conclusion

Hayek once observed, "The history of government management of money has, except for a few short happy periods, been one of incessant fraud and deception."[20Quoted in Wriston (1995).] Sounding a similar theme in the conclusion to their book on central banks, Deane and Pringle (1994: 346) wrote, "Trust in money depends above all on controlling the power of the state." Throughout history, governments have used their control over the money supply to periodically exact inflation taxes. But governments' ability to maintain a monopoly over their money supplies appears to be fading fast.

Businesses, financial institutions, and individual investors are becoming ever more comfortable moving among currencies as they look for investments and seek out loans. A growing number of businesses and households have bank accounts denominated in foreign currencies as they search for both convenience and improved returns on their investments. Increasingly, central banks are forced to act as competitors or see their currencies, their financial markets, and their economies bypassed by the world's market participants. As a result, residents of developed countries are already enjoying improved price stability. There is even evidence that the U.S. Treasury Department is feeling the competitive heat as it is finally moving to offer inflation indexed bonds.

The new question is whether competition will also arise from the private sector. (More precisely, the question is whether private sources of money will pose a serious competitive challenge to government-sanctioned monies.) Advancing technology will make it increasingly difficult for government agents to regulate or tax private monies out of existence as they have in the past. Even if courts or government regulators declare certain financial assets as "out of bounds," enforcing those decisions may prove impossible if suppliers of the new currencies cross national boundaries or have no physical location against which government actions can take place. What is "money" will be determined by what buyers and sellers accept and use as money rather than by government definitions.

For the time being at least, government-sanctioned money and traditional banking arrangements will enjoy the benefit of the doubt because of their familiarity, if for no other reason. But market participants may prove impatient if government arrangements prove themselves untrustworthy. Real alternatives will be readily at hand.

In The Future of Electronic Commerce, Bollier (1996: 24) wrote, "Money is as much a social convention as an object or technology. Its use value in a given form depends critically upon widespread acceptance of that form." He then quoted Dee Hock, founder and CEO emeritus of Visa International: "At bottom, [electronic value exchange] is an institutional problem, not a technical one. It is about developing a set of relationships among the players and creating guarantees of absolute trust." In a similar vein, Deane and Pringle (1994: 346) quoted Herbert Frankel of Oxford University: "The debate about the future of money is not about inflation or deflation, fixed or flexible exchange rates, gold or paper standards; it is about the kind of society in which money is to operate." If the debates over the future of money are any indication, the future may hold increasing promise of freedom and choice for Wall Street financiers, Florida retirees, and everyone between.

References

Bollier, D., rapporteur (1996) The Future of Electronic Commerce. Washington, D.C.: The Aspen Institute.

Browne, F.X., and Cronin, D. (1995) "Payments Technologies, Financial Innovation and Laissez-Faire Banking." Cato Journal 15 (Spring/Summer): 101-16.

Deane, M., and Pringle, R. (1994) The Central Banks. New York: Viking Penguin.

Doti, L.P., and Schweikart, L. (1987) "Western Frontier Banking: Symbols of Safety." Paper presented at the Western Economics Association meetings, Vancouver, B. C., July.

Dowd, K., ed. (1992) The Experience of Free Banking. London: Routledge.

England, C. (1988) "Agency Costs and Unregulated Banks: Could Depositors Protect Themselves?" In C. England and T. Huertas (eds.) The Financial Services Revolution: Policy Directions for the Future, 317-43. Boston: Kluwer.

Hayek, F.A. (1976) Choice in Currency: A Way to Stop Inflation. London: Institute of Economic Affairs.

Hayek, F.A. (1978) Denationalisation of Money--The Argument Refined: An Analysis of the Theory and Practice of Concurrent Currencies. 2d ed. London: Institute of Economic Affairs.

Kaufman, G.G. (1988) "The Truth about Bank Runs." In C. England and T. Huertas (eds.) The Financial Services Revolution: Policy Directions for the Future, 9-40. Boston: Kluwer.

O'Brien, R. (1995) "Who Rules the World's Financial Markets?" Harvard Business Review (March/April).

Rockoff, H. (1975) The Free Banking Era: A Re-examination. New York: Arno Press.

Rolnick, A.J., and Weber, W.E. (1986) "Inherent Instability in Banking: The Free Banking Experience." Cato Journal 5 (Winter): 877-90.

Selgin, G.A. (1988) The Theory of Free Banking: Money Supply under Competitive Note Issue. Totowa, N.J.: Rowman and Littlefield.

Vaubel, R. (1986) "Currency Competition versus Governmental Money Monopolies." Cato Journal 5 (Winter): 927-42.

White, L.H. (1984) Free Banking in Britain: Theory, Experience and Debate, 1800-1845. New York: Cambridge University Press.

White, L.H. (1989) Competition and Currency: Essays on Free Banking and Money. New York: New York University Press.

Woodall, P. (1995) "The World Economy: Who's in the Driving Seat?" The Economist (Survey), 7 October.

Wriston, W. (1995) "Money: Back to Future?" Wall Street Journal, 24 November: A8.

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