Even if he confines himself to the most regular of commodity bills and looks with aversion on any paper that displays a suspiciously round figure,the banker must not only know what the transaction is which he is asked to finance and how it is likely to turn out, but he must also know the customer, his business, and even his private habits, and get, by frequently “talking things over with him,” a clear picture of his situation. … However, this is not only highly skilled work, proficiency in which cannot be acquired in any school except that of experience, but also work which requires intellectual and moral qualities not present in all people who take to the banking profession.
… In the case of bankers, however, failure to be up to what is a very high mark interferes with the working of the system as a whole. Moreover, bankers may, at some times and in some countries, fail to be up to the mark corporatively: that is to say, tradition and standards may be absent to such a degree that practically anyone, however lacking in aptitude and training, can drift into the banking business, find customers, and deal with them according to his own ideas. In such countries or times, wildcat banking develops. This in itself is sufficient to turn the history of capitalist evolution into a history of catastrophes.
From Business Cycles: A Theoretical, Historical and Statistical Analysis of the Capitalist Process.
What a magnificent book! Leaving my heavily-annotated copy on the NYC subway is one of my great regrets in life, bookwise. It doesn’t seem to be in print now. Does anybody still read it?