Moreover, as seen in the previous section, the interior banks had refused any cooperation with the NYCH in previous decades, and thus could not benefit from its liquidity provision.
In such a context, the NYCH acted as the lender of last resort and set a 6% interest rate (Myers, 1931).
In effect, in 1903 and 1904, the NYCH required a larger reserve ratio from the trust companies in order to converge towards regulatory uniformity within its organisation and improve the stability of the banking system at large (Sprague, 1908, pp.
During the Panic of October 1907, the NYCH injected $101 millions in loan certificates in aid of member banks (national banks and state banks, mainly) and significantly helped stabilise their liquidity and their credit supply, but it did not straightforwardly provide assistance to the New York trust companies, whose balance sheets fell in size (Moen and Tallman, 1992, 2000).
the NYCH actively attempted to manage risk-taking and moral hazard, or the lack of information on the New York trust companies restricted the NYCH in granting them direct loans.